Question

Which of the following would cause a decrease in the price of a good? a. an increasing shift in the demand for good and no shift in supply b. an increasing shift in the supply of a good and no shift in demand c. an increasing shift in the demand for good and a decreasing shift in supply d. a decreasing shift in the supply of a good and no shift in demand

Answer 1

The answer to the question is b- an increasing shift in the supply of a good and no shift in demand

With no change in supply, when there is an increase in demand, the demand curve tends to move right. As demand rises, the ancient equilibrium price is a condition of excess demand. This contributes to an rise in buyers ' rivalry, which in turn pushes the price up.

It naturally serves as an incentive for providers to boost supply as cost rises and also leads to a drop in demand. It is essential to understand that until a fresh equilibrium is developed these procedures will continue to function. There is an increase in both the cost and the amount of the equilibrium.

The supply curve shifts to the right when supply rises, followed by no change in demand. A condition of excess supply occurs at the ancient stage of equilibrium when supply rises. This induces a seller contest to sell their supply, which in turn lowers the price.

In turn, this price reduction leads to a decline in supply and a increase in demand. These procedures work until a fresh level of equilibrium is reached. Finally, these circumstances are characterized by a price reduction and a volume boost.