Supply of a food item increases by more than the demand for the food item increases.One thing for certain is that
A)the price of the food item rises.
B)income elasticity of demand is less than 0.
C)the supply curve is price inelastic.
D)real income falls as a result.
E)none of the above

Question

Quizplus · Accepted Answer

When supply increases more than demand, the price of the food item is likely to fall, not rise. The other options do not necessarily follow from the given scenario.

Supply of a Food Item Increases by More Than the Demand