Select the phrase that correctly completes the following statement.'A positive change in technology caused an increase in the supply of flat-screen televisions; as a result,________.'
A) the price of flat-screen televisions decreased, and the demand for flat-screen televisions increased
B) the equilibrium quantity of flat-screen televisions decreased
C) the price of flat-screen televisions decreased, and the quantity demanded of flat-screen televisions increased
D) the price of flat-screen televisions decreased. The lower price caused the supply of flat-screen televisions to decrease.

Question

Quizplus · Accepted Answer

An increase in supply leads to a decrease in price and an increase in quantity demanded, which is described in option C. Option A is incorrect because it incorrectly states that the demand for flat-screen televisions increased, but we cannot infer this from the information given. Option B is also incorrect because an increase in supply would not cause a decrease in equilibrium quantity. Option D is incorrect because the lower price would not cause a decrease in supply; it would only cause a movement along the supply curve.

Select the Phrase That Correctly Completes the Following Statement