What tends to decrease when the supply of a good increases?

• A. Demand
• B. Equilibrium price
• C. Scarcity
• D. Marginal cost

Answer: (B)

When supply increases, the market has more of the good available at every price. With demand unchanged, this extra availability pushes the market to a new balance where the price is lower and the quantity bought and sold is higher. The lower price arises because producers must attract buyers to the larger supply, so the equilibrium shifts along the demand curve to a price that clears the bigger supply.

Demand wouldn’t automatically fall just because supply rose; in fact, price often falls and quantity demanded rises as buyers respond to the lower price. Scarcity is a broader concept about limited resources and is not the direct outcome of a single market's supply increase. Marginal cost relates to the cost of producing one more unit and can vary with output, but the question targets the price outcome from the shift in supply.