When a product becomes popular, we should expect

Question

BlackTom AI · Accepted Answer

A product becoming popular increases consumers’ willingness to buy at every price — i.e., demand increases (the demand curve shifts right).

1) Relevant concepts
- Demand curve: relationship between price and quantity demanded; a rightward shift means higher quantity demanded at each price.
- Supply curve: relationship between price and quantity supplied.
- Market equilibrium: price and quantity where demand = supply. A rightward shift in demand generally raises equilibrium price and quantity.

2) Step‑by‑step reasoning (graphical and algebraic)
Graphically: with supply fixed, shifting demand right moves the intersection with supply to a higher price and a larger quantity.

Algebraically, let demand be P = c − dQ (d>0) and supply be P = a + bQ (b>0). Initial equilibrium:
c − dQ0 = a + bQ0
=> Q0 = (c − a)/(b + d)
=> P0 = a + bQ0

If popularity raises demand, raise the intercept: c' > c. New equilibrium:
c' − dQ1 = a + bQ1
=> Q1 = (c' − a)/(b + d)

Since c' > c, (c' − a) > (c − a) so Q1 > Q0. Then P1 = a + bQ1 > a + bQ0 = P0. Thus both equilibrium price and quantity increase.

3) Calculations (intermediate steps shown above) confirm the sign changes: numerator increases → equilibrium quantity increases → equilibrium price increases.

4) Why the correct answer is correct
Because popularity raises demand (not supply), the demand curve shifts right; with supply unchanged, that shift produces a higher equilibrium price and a larger traded quantity.

5) Why other options are incorrect
- (a) Decrease in demand: opposite of popularity; would lower price and quantity.
- (b) Decrease in supply: raises price but reduces quantity; unrelated to popularity-driven demand increase.
- (c) Increase in supply: would lower price and increase quantity; again not what popularity causes.

6) Conclusion
Therefore the correct choice is (d): An increase in demand leading to a higher equilibrium price and a larger equilibrium quantity — matches the provided answer.

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

类似问题

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希望你的学习变得更简单

Consider a market in which the market demand is given by the equation QD = 44 – 3P and market supply is given by the equation QS = 2P + 4. If the price in the market is $2, there is a of in the market.