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

A. a fall in price and an increase in quantity bought and sold
B. an increase in price and increase in quantity bought and sold
C. a fall in price and a fall in quantity bought and sold
D. an increase in quantity supplied and demanded only

Correct Answer: Option A

A. a fall in price and an increase in quantity bought and sold

Explanation

A change in supply will cause equilibrium price and output to change in opposite directions. a. An increase in supply will cause a reduction in the equilibrium price and an increase in the equilibrium quantity of a good.