Let D = demand, S = supply, P = equilibrium price, 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 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 Centers for Disease Control and Prevention will likely increase the demand for walnuts as consumers become more aware of their health benefits. This will shift the demand curve to the right, leading to an increase in both the equilibrium price and quantity. The announcement will not affect the supply of walnuts, hence the supply curve will remain unchanged.

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