Let D = demand,S = supply,P = equilibrium price,Q = equilibrium quantity.What happens in the market for sushi if the Surgeon General announces that a majority of the raw fish that is imported to make sushi contains high levels of toxic mercury?

Question

Quizplus · Accepted Answer

The announcement by the Surgeon General about toxic mercury in the raw fish imported for making sushi is likely to cause a decrease in demand as consumers become aware of the potential health risks. However, since the supply remains unchanged, this will create a situation of surplus supply, causing the equilibrium price and quantity to decrease. Therefore, option A is the best choice.

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