An increase in supply with unchanged demand leads to ____________.

Rise in price and fall in quantity

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Fall in both price and quantity

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Fall in price and rice in quantity

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Rise in both price and quantity

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is C Fall in price and rice in quantity
If demand increases (decreases) and supply is unchanged, then it leads to a higher (lower) equilibrium price and quantity. If supply increases (decreases) and demand is unchanged, then it leads to a lower (higher) equilibrium price and higher (lower) quantity.

Suggest Corrections

Similar questions

An increase in demand leads to a decrease in both the equilibrium price and the equilibrium quantity. A decrease in demand leads to a rise in both the equilibrium price and the equilibrium quantity.

Q. If a rightward shift of the supply curve leads to a 6 percent decrease in the price and a 5 percent increase in the quantity demanded, the price elasticity of demand is _____.

[1 mark]

Q. An increase in demand while supply remains unchanged causes equilibrium price and quantity to ________.

Explain the effect of a simultaneous decrease in both demand and supply on equilibrium price and quantity.

When both demand and supply increase, the equilibrium quantity rises but the change in equilibrium price is ambiguous.

Join BYJU'S Learning Program