Question

Assuming competitive markets with typical supply and demand curves, which of the following statements is correct?

A. An increase in supply with no change in demand will result in an increase in price.
B. An increase in supply with a decrease in demand will result in an increase in price.
C. An increase in demand with no change in supply will result in an increase in sales
D. An increase in supply with no change in demand will result in a decline in sales.

Answer 1

An increase in supply with no change in demand will result in decreased price. An increase in supply with a decrease in demand will result in a decrease in price. An increase in demand with no change in supply will result in increased sales.

Step-by-step explanation:

In a competitive market with typical supply and demand curves, an increase in supply with no change in demand will result in decreased price.

This is because when the supply increases, there is a greater quantity of the product available, which can lead to a decrease in the price as sellers compete to sell their products.

An increase in supply with a decrease in demand will result in a decrease in price.

When there is both an increase in supply and a decrease in demand, there is an even greater surplus of the product, which puts more downward pressure on the price.

An increase in demand with no change in supply will result in increased sales. When demand increases while supply remains constant, sellers can sell more of their product at the same price, resulting in higher sales.