When a product becomes popular, we should expect

Question

BlackTom AI · Accepted Answer

An increase in demand is expected when a product becomes popular, because popularity raises the willingness of consumers to buy at each price.

1) Relevant knowledge points and concepts
- Demand curve: shows quantity demanded at each price; a rightward shift means more quantity demanded at every price (increase in demand).
- Supply curve: shows quantity supplied at each price; unchanged unless sellers’ costs or technology change.
- Market equilibrium: intersection of demand and supply; a shift in demand changes equilibrium price and quantity.
- Comparative statics: a rightward demand shift with supply fixed leads to a higher equilibrium price and larger equilibrium quantity.

2) Step-by-step reasoning
- Popularity increases consumers’ preferences and willingness to buy → demand curve shifts right (increase in demand).
- At the original price there is now excess demand (shortage), so buyers compete, pushing price up.
- As price rises, sellers supply more (movement along the unchanged supply curve), and buyers reduce quantity demanded relative to the excess but still purchase more than before at the new equilibrium.
- The new intersection of demand and supply is at a higher price and a larger traded quantity.

3) Calculations (simple numeric example)
- Suppose initial demand Qd = 100 − 2P and supply Qs = 20 + 2P.
- Initial equilibrium: 100 − 2P = 20 + 2P → 80 = 4P → P = 20. Quantity Q = 100 − 2(20) = 60.
- Popularity shifts demand right: Qd' = 120 − 2P.
- New equilibrium: 120 − 2P = 20 + 2P → 100 = 4P → P' = 25. New Q' = 120 − 2(25) = 70.
- Price rose from 20 to 25; quantity rose from 60 to 70.

4) Why the correct answer is correct
Because popularity increases demand (rightward shift) while supply stays the same in the short run, the market moves to an equilibrium with both a higher price and a larger quantity traded.

5) Why the other choices are incorrect
- b (decrease in demand): contradicts the premise of increased popularity; that would lower price and quantity.
- c (increase in supply): would lower price and increase quantity, but popularity affects demand, not supply.
- d (decrease in supply): would raise price but reduce quantity; popularity causes more demand, not less supply.

6) Conclusion
The correct choice is a: an increase in demand causing a higher equilibrium price and a larger traded quantity, which matches the provided answer.

When a product becomes popular, we should expect单项选择题

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