Suppose we observe a fall in the price of good A and an increase in the quantity of good A bought and sold.Which one of the following is a likely explanation?
A)The law of supply is violated.
B)The demand for A decreased.
C)The demand for A increased.
D)The supply of A increased.
E)The supply of A decreased.

Question

Quizplus · Accepted Answer

An increase in the supply of good A would lead to a lower price and a higher quantity sold, consistent with the observed changes.

Suppose We Observe a Fall in the Price of Good