Consider a market for computers. Assume that the supply of computers increases due to some reason. What will happen?
Answer & explanation
Correct answer: option 3
The correct answer is Option 3: Increase in equilibrium quantity
- When the supply of computers increases, the supply curve shifts to the right.
- This means that at every price level, more computers are available in the market.
- As a result, the equilibrium price decreases, and the equilibrium quantity increases.