When supply increases and demand decreases, what is the expected outcome on pricing?

When supply increases and demand decreases, prices are expected to decrease. This is rooted in the principles of supply and demand, which dictate that when there is an oversupply of goods (due to increased supply) and a lesser demand for these goods, the market tends to adjust to this imbalance.

With more goods available than consumers are willing to buy, sellers will often reduce their prices to entice buyers. As prices go down, the market seeks to find a new equilibrium where the quantity of goods supplied matches the quantity demanded at a lower price point. This principle illustrates how an increase in supply, combined with a decrease in demand, results in downward pressure on prices in the marketplace.

The other options do not align with this economic principle: prices remaining unchanged would suggest no significant change in market conditions, an increase in prices contradicts the larger supply with lower demand, and volatility usually indicates fluctuating prices rather than a consistent decrease resulting from a surplus in supply.