Answer to Question #81234 in Macroeconomics for Aimee Bichler

Question

As a result of an increase in the supply of a good, the equilibrium quantity ________ and the equilibrium price_______?

a)increases; falls
b)increases; rises
c)decreases; falls
d) decreases; rises

Answer 1

increases; falls
More quantity of goods as a result of an increase in the supply of a goods decrease equilibrium price. Then consumers form bigger demand, the equilibrium quantity increases.