Question

What will cause a decrease in market equilibrium price and an increase in equilibrium quantity? - an increase in supply - an increase in demand - a decrease in supply - a decrease in demand

Answer 1

Answer:

- an increase in supply

Explanation:

The interaction between the quantity demanded and the quantity supplied determines the price and the equilibrium quantity in a market economy. This is due to the rationality criteria of the economic agents (consumers will buy more quantities at the lowest possible price) and the law of supply and demand, according to which the excess / lack of products causes price decrease / increase and also an increase / decrease in quantity demanded. Thus, in order for the equilibrium price to decrease and the equilibrium quantity to increase, there must be an increase in supply, as there will be more products on the market, which will cause the price to fall. After the price drops, consumers will demand more. In this way, new price and quantity balance parameters will be determined.