How does a significant increase in supply in a specific industry during an economic recovery affect market equilibrium?

When there is a significant increase in supply in a specific industry during an economic recovery, it usually leads to a decrease in prices for the goods or services in that industry. This happens because more products are available than consumers want to buy at the previous price, creating a surplus. As prices drop, more consumers are likely to purchase these products, which helps to balance the supply and demand. For example, if a car manufacturer produces many more vehicles as the economy improves, the increased supply may lower car prices, making them more affordable for buyers. Ultimately, this process helps the market reach a new equilibrium where the quantity supplied matches the quantity demanded at a lower price.