In the late 1980s, some medical authorities announced that an acne medication named Retin-A had previously unknown wrinkle-reducing properties.An economist would predict that, following this announcement, the price of Retin-A ____ and the quantity sold__.
A)would rise; would decrease
B)would rise; would increase
C)would fall; would fall
D)would fall; would rise

Question

Quizplus · Accepted Answer

The announcement of Retin-A's wrinkle-reducing properties creates new demand for the product beyond its original use as an acne medication. This will lead to an increase in both the price and quantity sold as consumers are willing to pay more for the added benefit.

In the Late 1980s, Some Medical Authorities Announced That an Acne