The income of consumers increases. and the wage rate in the seafood industry increases. As a result
A) the price of seafood stays the same and the quantity sold can either increase or decrease, depending on whether the change in demand is greater than the change in supply.
B) the price of seafood increases and the quantity sold can either increase, decrease or stay the same depending on whether the change in demand was greater than the change in supply.
C) the equilibrium quantity sold increases and price can either increase or decrease, depending on whether the change in demand is greater than the change in supply.
D) the equilibrium quantity sold can either increase or decrease and the price can either increase or decrease, depending on whether the change in demand was greater than the change in supply.

Question

Quizplus · Accepted Answer

When consumers' income increases, their demand for goods, including seafood, typically increases, leading to a potential increase in the price of seafood if supply remains constant. On the other hand, an increase in the wage rate in the seafood industry can lead to an increase in production costs, potentially decreasing supply or increasing the price of seafood to maintain profitability. The overall effect on the quantity sold depends on the relative magnitudes of the demand and supply shifts. If the demand increase is greater than the supply decrease, the quantity sold could increase, and vice versa. Therefore, the price of seafood is likely to increase, but the quantity sold can either increase, decrease, or stay the same, depending on the relative changes in demand and supply.

The Income of Consumers Increases