Refer to the information provided in Figure 12.4 below to answer the question(s) that follow. Figure 12.4
There are two sectors in the economy, X and Y, and both are in long-run, zero-profit equilibrium at the intersections of S 0 and D 0.
-Refer to Figure 12.4. Assume consumer preference changes toward X and away from Y. Ceteris paribus, the equilibrium price of X will ________ and the equilibrium price of Y will ________.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease

Question

Refer to the information provided in Figure 12.4 below to answer the question(s) that follow.  Figure 12.4
There are two sectors in the economy, X and Y, and both are in long-run, zero-profit equilibrium at the intersections of S 0 and D 0. 
-Refer to Figure 12.4. Assume consumer preference changes toward X and away from Y. Ceteris paribus, the equilibrium price of X will ________ and the equilibrium price of Y will ________.
A) increase; increase 
B) increase; decrease 
C) decrease; increase 
D) decrease; decrease

Quizplus · Accepted Answer

When consumer preference shifts toward good X and away from good Y, the demand for X increases, leading to a higher equilibrium price for X. Conversely, the demand for Y decreases, leading to a lower equilibrium price for Y.

Refer to the Information Provided in Figure 12