Which of the following factors is most likely to lower the price of a product?

• A. An increase in the price of a substitute good
• B. A decrease in the number of sellers in the market
• C. An increase in the supply of the product
• D. An increase in consumer income for a normal good

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the relationship between supply, demand, and price. Price is determined by the interaction of supply and demand in the market.
2. Step 2: Analyze how an increase in the price of a substitute good affects demand. Typically, if the price of a substitute rises, demand for the original product increases, which tends to raise its price.
3. Step 3: Consider the effect of a decrease in the number of sellers. Fewer sellers usually means less supply, which tends to increase the price of the product.
4. Step 4: Examine what happens when there is an increase in the supply of the product. An increase in supply means more of the product is available at every price, which tends to lower the market price.
5. Step 5: Look at the impact of an increase in consumer income for a normal good. Higher income usually increases demand for normal goods, which tends to raise their price.