Which of the following describes the results of an increase in supply on price and quintity in the market? a. Both price and quantity increase b. Both price and quantity decrease c. Price increases and quantity decreases d. Price decreases and quantity increases e. Insufficient information

Question

Corey Newman

Business

16 May, 05:44

Which of the following describes the results of an increase in supply on price and quintity in the market? a. Both price and quantity increase b. Both price and quantity decrease c. Price increases and quantity decreases d. Price decreases and quantity increases e. Insufficient information

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Answers (1)

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Alexis Horton · Answer 1

a. Both price and quantity increase

Explanation:

Supply of product is directly propotional to the price of price or income of consumer. Therefore, if price increases of the product, supply of that particular product also increases. The Manufacturer or supplier increase the supply of product in the market to maximize the profit from the increase in price. As there is increase in price and increase in supply of quantity, which means there is shift of supply curve toward right.