Shown graphically as a rightward shift of the supply curve

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An increase in the supply of a product can be shown graphically as a rightward shift of the supply curve. The graph will clearly show that we would expect the equilibrium price to fall and the equilibrium quantity to increase. Use a general solution for P* and Q* at equilibrium and the process of comparative statics to mathematically prove these two results.

Reference no: EM13735547

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