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What will cause a decrease in market equilibrium price and an increase in equilibrium...
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Of the options that you have given here, the thing that would cause an increase in equilibrium quantity and a decrease in equilibrium price is an increase in supply.
To see how this works, the best thing to do is use a graph. First, you draw supply and demand curves to represent the equilibrium price and quantity before the change. Then, you draw in a new supply curve to show an increase in supply. An increase in supply is shown by a movement of the curve to the right.
When you move the supply curve to the right (assuming the demand curve does not move) you have a new equilibrium in which the price has gone down while the quantity has increased.
Posted by pohnpei397 on October 2, 2012 at 5:00 PM (Answer #1)
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