Explain with the help of a diagram the effect of a rightward shift of supply curve of a commodity on Its equilibrium price and quantity. OR Market for a good is in equilibrium. Supply of the good 'increases'. Explain the chatn of effects of this change.

Explain with the help of a diagram the effect of a rightward shift of

1.	Explain with the help of a diagram the effect of a rightward shift of supply curve of a commodity on Its equilibrium price and quantity. OR Market for a good is in equilibrium. Supply of the good 'increases'. Explain the chatn of effects of this change.
Answer» SOLUTION :An increase in supply of a commodity leads to a shift in the supply CURVE rightwards. When supply increases, it creates an excess supply at the old equilibrium price. This leads to a COMPETITON among sellers, which reduces the price. DECREASE in price leads to an increase in demand and fall in supply. These changes continue till a new equilibrium is achieved. EVENTUALLY, equilibrium price falls and equilibrium quantity rises.