Asked by Alicia Ebding on May 12, 2024
Verified
(Figure: Shifts in Demand and Supply IV) Use Figure: Shifts in Demand and Supply IV.The figure shows how supply and demand might shift in response to specific events.Suppose the Surgeon General announces that eating chocolate prevents heart disease.Which panel BEST describes how this will affect the market for chocolate?
A) Panel A
B) Panel B
C) Panel C
D) Panel D
Chocolate
A sweet, typically brown food preparation of roasted and ground cacao seeds, either in the form of a solid block or liquid.
Heart Disease
A range of conditions that affect the heart, including blood vessel diseases, coronary artery disease, heart rhythm problems, and others.
- Investigate the contribution of external events to determining the equilibrium price and quantity in the market.
- Identify the impact that shifts in consumer preferences have on the demand within a market.
Verified Answer
NV
Nimesh ViraniMay 14, 2024
Final Answer :
B
Explanation :
The announcement from the Surgeon General that chocolate prevents heart disease would be likely to increase the demand for chocolate. This is because consumers would now have an additional reason to purchase chocolate. Panel B shows an increase in demand (shift to the right), which would result in a new equilibrium price and quantity higher than before the announcement. Panels A, C, and D show shifts in supply, but the question asks about the effect on demand.
Learning Objectives
- Investigate the contribution of external events to determining the equilibrium price and quantity in the market.
- Identify the impact that shifts in consumer preferences have on the demand within a market.
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