Let D = demand,S = supply,P = equilibrium price,Q = equilibrium quantity.What happens in the market for walnuts if the Centre for Disease Control and Prevention announces that consuming half a cup of walnuts each week helps to lower bad levels of 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 Centre for Disease Control and Prevention will likely lead to an increase in demand for walnuts as consumers are made aware of the potential health benefits. This will result in an increase in demand (D), but there will be no change in supply (S). The increase in demand will cause the equilibrium price (P) and quantity (Q) to increase as well. Therefore, the correct answer is A.

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