In the following question you are asked to determine,other things equal,the effects of a given change in a determinant of demand or supply for product X upon (1)the demand (D)for,or supply (S)of,X; (2)the equilibrium price (P)of X;and (3)the equilibrium quantity (Q)of X. An increase in the tastes and preferences for X will:

Question

Quizplus · Accepted Answer

An increase in tastes and preferences for X will increase the demand for X, shifting the demand curve to the right (D1 to D2). This will lead to an increase in the equilibrium price (P1 to P2) and quantity (Q1 to Q2) of X. It will not affect the supply of X, so option A and B are incorrect. Similarly, it will not lead to a decrease in demand, price and quantity of X, which rules out option D. Therefore, option C is the correct choice.

In the Following Question You Are Asked to Determine,other Things