Question

ceteris paribus, an increase in the supply of a good causes which of the following?
a. raises the equilibrium price, and raises the quantity bought and sold.
b. raises the equilibrium price, and increases the quantity bought and sold.
c. lowers the equilibrium price, and reduces the quantity bought and sold.
d. lowers the equilibrium price, and increases the quantity bought and sold.

Explanation:

Ceteris paribus (all else equal), an increase in supply shifts the supply curve to the right. This creates a surplus at the original equilibrium price, pushing the price down. As the price falls, quantity demanded rises, leading to a new equilibrium with a lower price and higher quantity bought and sold.

Answer:

d. Lowers the equilibrium price, and increases the quantity bought and sold.