Question

If the market for a certain product experiences an increase in supply, which of the following effects is expected to occur? a. Equilibrium price would fall. b. Equilibrium quantity would rise. c. Equilibrium price would rise. d. Both a and b are correct.

Answer 1

Answer:

D. Both a and b

Explanation:

There exist an inverse relationship between the amount of goods supplied and the prices of those commodities assuming demand remains constant. When the market of a certain product experiences an increase in supply the Equilibrium price would fall since there's more supply than demand. Also the, equilibrium quantities of those goods supplied would also increase because again supply is greater than demand.