Assume that the graphs show a competitive market for the product stated in the question. Select the graph above that best shows the change in the market specified in the following situation: In the market for leather coats, when leather coats become more fashionable among young consumers.

Question

Assume that the graphs show a competitive market for the product stated in the question.   Select the graph above that best shows the change in the market specified in the following situation: In the market for leather coats, when leather coats become more fashionable among young consumers.

Quizplus · Accepted Answer

In a competitive market, when a product becomes more fashionable, demand increases. Graph A shows an increase in demand, which results in an increase in both price and quantity of the product. This is the correct representation of the situation described in the question. Graph B shows an increase in supply, which would not be the case when the demand increases due to a change in fashion. Graph C shows neither an increase in demand nor supply. Graph D shows a decrease in demand, which is not consistent with the situation described in the question. Therefore, the best choice is A.

Assume That the Graphs Show a Competitive Market for the Product