Suppose the Terrific Taffy Company ran a very successful advertising campaign. Economic analysis would suggest that the campaign would cause the equilibrium price to _____ and the equilibrium quantity to _____.

Question

Quizplus · Accepted Answer

When a company runs a successful advertising campaign, it increases the demand for its product. This would cause the equilibrium price to rise as the demand curve shifts to the right. Additionally, the equilibrium quantity would also rise as the increased demand leads to more units being sold. Therefore, choice A is the correct answer.

Suppose the Terrific Taffy Company Ran a Very Successful Advertising