If supply of a good increases while its demand decreases, then equilibrium price will fall

Economics Dec 10, 2020

If supply of a good increases while its demand decreases, then equilibrium price will fall.

a) True

b) False

Expert Solution

The statement is true.

If supply increases while demand decreases, the equilibrium price will fall. In order to sell their output, producers must lower the price to comply with the law of demand.

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