Let D = demand, S = supply, P = equilibrium price, and Q= equilibrium quantity.What happens in the market for walnuts if the Centers for Disease Control and Prevention announces that consuming a half cup of walnuts each week helps to lower levels of bad cholesterol?
A)D increases, S no change, P and Q increase.
B)S increases, D no change, P decreases, Q increases.
C)D and S increase, P and Q decrease.
D)D no change, S increases, P decreases, Q decreases.

Question

Quizplus · Accepted Answer

The announcement by the Centers for Disease Control and Prevention will likely increase the demand for walnuts as consumers become aware of their health benefits. This will cause the demand curve to shift to the right, leading to an increase in both equilibrium price and quantity. Supply is unlikely to be affected in the short run, as it takes time for walnut farmers to respond to changes in demand. Therefore, option A is the best choice.

Let D = Demand, S = Supply, P = Equilibrium