Use the following to answer question:
-(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

Question

Use the following to answer question: 
-(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

Quizplus · Accepted Answer

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.

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