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WAEC Economics 2014 Question 15

Question 15

Price Determination

Other things being equal, an increase in supply will lead to

  1. A.a fall in price and an increase in quantity bought and sold.
  2. B.an increase in price and increase in quantity bought and sold.
  3. C.a fall in price and a fall in quantity bought and sold.
  4. D.an increase in quantity supplied and demanded only.
Show the answer and explanation

Answer: A (a fall in price and an increase in quantity bought and sold.)

Explanation

The supply curve shifts right: price falls and more is bought and sold.