Concept:An increase in supply shifts the supply curve to the right while demand remains unchanged, affecting both equilibrium price and quantity.
Explanation:Suppose the demand for a good stays constant.
When supply increases, producers offer a larger quantity at every possible price.
At the original equilibrium price, this creates a surplus because quantity supplied now exceeds quantity demanded.
To remove this surplus, sellers reduce the price.
As the price falls, buyers are willing to purchase a greater quantity.
So the market moves to a new equilibrium where price is lower and the quantity bought and sold is higher.
Thus, an increase in supply leads to a fall in price and an expansion in the equilibrium quantity traded.
Answer:A fall in price and an increase in quantity bought and sold.
This is Option A.