Question

When supply goes up, what happens to price and quantity?

A. P goes up and Q goes up
B. P goes down and Q goes down
C. The change is the same
D. Neither P nor Q change
E. One change in P or Q will be indeterminate

Answer 1

When supply goes up, then ` P goes down and Q goes up.`

None of the given options is correct

Step-by-step explanation:

When supply goes up, the price and quantity in the market usually change. To understand what happens, we need to consider the law of supply and demand.

According to the law of supply, as the supply of a good or service increases, the price tends to decrease. This is because when there is more supply available, sellers compete with each other to attract buyers by offering lower prices. So, when supply goes up, the price usually goes down.

On the other hand, when the supply of a good or service increases, the quantity usually goes up as well. This is because there is more of the product available in the market, and buyers are more willing to purchase it at the lower price. As a result, the quantity demanded increases.

To summarize, when supply goes up:

• - Price tends to go down because of increased competition among sellers.
• - Quantity tends to go up because buyers are more willing to purchase the product at the lower price.

None of the given options is correct