Attempts are being made to develop a biodegradable plastic using agricultural produce such as potatoes.Identify a likely impact on the equilibrium price and quantity of potatoes if such attempts are successful,all other things remaining constant.

A) The equilibrium price will increase and the equilibrium quantity will decrease.
B) The equilibrium price will decrease and the equilibrium quantity will increase.
C) Both equilibrium price and quantity will decrease.
D) Both equilibrium price and quantity will increase.
E) There will be no change in the equilibrium price and quantity.

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Eduardo Nieves · Accepted Answer

Final Answer : D, Explanation :  If the attempts to develop biodegradable plastic using potatoes are successful, it would likely increase the demand for potatoes as a raw material. This increased demand, with supply remaining constant, would lead to an increase in both the equilibrium price and quantity of potatoes.

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