New oak tables are normal goods. What would happen to the equilibrium price and quantity in the market for oak tables if the price of maple tables rises, the price of oak wood rises, more buyers enter the market for oak tables, and the price of wood saws increased?

Question

Quizplus · Accepted Answer

The rise in the price of maple tables and more buyers entering the market increases demand for oak tables, pushing the price up. The rise in the price of oak wood and wood saws increases production costs, reducing supply, which also pushes the price up. The effect on quantity is ambiguous due to opposing demand and supply shifts.

New Oak Tables Are Normal Goods