A Level Economics (9708)•9708/12/M/J/21

Explanation
Supply Increase for Complements Steps:
- Increase in supply of X shifts its supply curve rightward.
- Demand curve for X remains unchanged, as complements affect joint demand but not X's own demand directly.
- New equilibrium occurs at intersection of new supply and original demand curves.
- Result: equilibrium price of X falls, equilibrium quantity of X rises. Why C is correct:
- By the law of supply and demand, a rightward supply shift lowers equilibrium price and raises equilibrium quantity, holding demand constant. Why the others are wrong:
- A: Quantity rises, does not decrease.
- B: Price falls, does not increase.
- D: Price falls (not rises) and quantity rises (not decreases). Final answer: C
Topic: The interaction of demand and supply
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