Which of the following would cause a decrease in market equilibrium price and an increase in equilibrium quantity? A

Economics Dec 09, 2020

Which of the following would cause a decrease in market equilibrium price and an increase in equilibrium quantity?

A. An increase in demand

B. A decrease in supply

C. An increase in supply

D. A decrease in demand

Expert Solution

The correct option is (c).

An increase in supply would cause a decrease in market equilibrium price and an increase in equilibrium quantity.

An increase in supply means that the supply of a good increase at each level of price. Such an increase in supply creates a surplus in the market, which drives the price downward. Hence, people will tend to consume more of the goods at a lower price.

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