QUESTION
Q15) If supply increases in a greater proportion than demand
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Correct
Solution:
If there is an increase in supply for goods and services while demand remains the same, prices tend to fall to a lower equilibrium price and a higher equilibrium quantity of goods and services.
Therefore, if supply increases in a greater proportion than demand, the new equilibrium price will be lower than the original equilibrium price and the new equilibrium quantity will be higher (Option d).
Correct option is (d)