Table 2.11 depicts the market for mushrooms (in thousands of kilograms per month).

-What is the effect of an increase in demand for a product?
A)Its price will rise and quantity traded will decrease.
B)Its price will rise and quantity traded will increase.
C)Its price will fall and quantity traded will decrease.
D)Its price will fall and quantity traded will increase.

Question

Table 2.11 depicts the market for mushrooms (in thousands of kilograms per month).
 
-What is the effect of an increase in demand for a product?
A)Its price will rise and quantity traded will decrease. 
B)Its price will rise and quantity traded will increase. 
C)Its price will fall and quantity traded will decrease. 
D)Its price will fall and quantity traded will increase.

Quizplus · Accepted Answer

An increase in demand will shift the demand curve to the right, leading to a higher equilibrium price and quantity traded. Therefore, the correct choice is (B) as the price will rise and the quantity traded will increase.

Table 211 Depicts the Market for Mushrooms (In Thousands of Kilograms