Suppose There Is an Increase in Supply That Reduces Market

question 68

True/False

Suppose there is an increase in supply that reduces market price. Consumer surplus increases because (1) consumer surplus received by existing buyers increases and (2) new buyers enter the market.

---

Definitions:

Conglomerate Merger

A merger between companies that operate in entirely different industries.

Supplier

An entity that provides goods or services to another organization involved in a supply chain.

Conglomerate

A large corporation composed of diverse companies operating in various industries under one corporate group.

Production Synergies

The cost-saving or performance-enhancing effects achieved when two or more entities (e.g., companies or departments) combine their production efforts.