The market for sugar is in equilibrium. If the supply of sugar increases, the equilibrium price of sugar will ________ and the equilibrium quantity will ________.
- Aincrease; increase
- Bdecrease; decrease
- Cincrease; decrease
- Ddecrease; increase
Solution & Step-by-step Explanation
An increase in the supply of a commodity shifts the supply curve to the right. Holding demand constant, this surplus creates downward pressure on the price, causing the equilibrium price to decrease, while the equilibrium quantity transacted in the market increases.