Suppose there is a permanent shift of consumer preferences away from pretzels and toward potato chips. The most likely result would be
A) in the short run, economic losses in the potato chip market.
B) in the long run, a fall in the supply of potato chips.
C) in the short run, a rise in the price of pretzels.
D) short-run profits in the potato chip market increase.

Question

Quizplus · Accepted Answer

When consumer preferences shift toward a product, in this case, potato chips, demand for that product increases. This increased demand, especially if unexpected or sudden, can lead to higher prices and short-run profits for producers as they adjust to the new market conditions. The other options do not logically follow from a shift in consumer preferences toward potato chips.

Suppose There Is a Permanent Shift of Consumer Preferences Away