Question on: JAMB Economics - 2019
A rise in the supply of a commodity cause__________
A
an increase in the equilibrium price and decrease in the equilibrium quantity bought and sold
B
an increase in both equilibrium
C
a decrease in the equilibrium price and an increase in the equilibrium quantity bought and sold
D
a decrease in both equilibrium
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Correct Option: C
A rise in the supply of a commodity leads to:
- A decrease in the equilibrium price: With more of the commodity available, the price will tend to fall as sellers compete to sell their goods.
- An increase in the equilibrium quantity bought and sold: Consumers will be able to purchase more of the commodity due to the lower price and increased availability, leading to a higher quantity exchanged in the market.
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