Final answer:
With a horizontal demand curve indicating perfectly elastic demand, a rightward shift in the supply curve will not change the equilibrium price but will increase the equilibrium quantity.
Step-by-step explanation:
If the demand curve for a good is horizontal, this indicates that the good has a perfectly elastic demand at that price level, meaning consumers are willing to buy any quantity at the set price and no other. When there is a rightward shift of the supply curve, indicative of an increase in supply, the new equilibrium point will occur where the increased supply intersects with the horizontal demand curve. In this scenario, the equilibrium price remains unchanged because the demand curve is perfectly elastic.
However, the equilibrium quantity will increase because there is now more of the good available at the same price.
When a horizontal demand curve shifts rightward due to a leftward shift in the supply curve, the new equilibrium price will increase. The equilibrium quantity will also increase.