Suppose the market for "soda X" is in equilibrium. If the FDA announced today that this soda has been proven to cause a fatal disease, what would be most likely to happen to the equilibrium price and equilibrium quantity of soda X?
a. price increases and quantity increases
b. price decreases and quantity increases
c. price increases and quantity increases
d. price decreases and quantity decreases
e. no change in price and quantity
D
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How many people are unemployed if the employment ratio is 75%, there are 90 million people employed, and there are 20 million people not in the labor force?
A) 20 million B) 10 million C) 5 million D) 0 million
Suppose a monopolist is considering starting a $500,000 advertising campaign. The current demand for its product is given by
p = 150 - 3Q where Q is the quantity of output in thousands. If the monopolist undertakes the advertising campaign, it expects demand to increase to p = 200 - 4Q The (non-advertising) cost for the monopolist is C(Q) = 30Q. a. Determine whether the monopolist should undertake the advertising campaign assuming that it is correctly anticipating the potential increase in demand. b. What is the most the monopolist will invest towards this advertising campaign?