13
QuizMultiple Choice

Business Finance and Economics — Test

Question 13 • Advanced Financial Algebra

How does the increase in production capacity (shift in supply) affect the equilibrium quantity?

Answer
A
The equilibrium quantity decreases.
B
The equilibrium quantity increases.
C
The equilibrium quantity fluctuates unpredictably.
D
The equilibrium quantity remains unchanged.

Explanation

An increase in production capacity shifts the supply curve to the right: producers can supply more at each price. With demand unchanged, the new equilibrium has a greater quantity traded, so the equilibrium quantity increases.

AI-written and checked against the verified answer.

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