In the market for bananas, favourable health trends towards bananas results inQuestion 6Select one:a.an increase in demand, and an increase in supplyb.an increase in the quantity demanded, and an increase in supplyc.an increase in demand, and an increase in the quantity suppliedd.an increase in demand, and no change in supply or quantity supplied
Question
In the market for bananas, favourable health trends towards bananas results inQuestion 6Select one:a.an increase in demand, and an increase in supplyb.an increase in the quantity demanded, and an increase in supplyc.an increase in demand, and an increase in the quantity suppliedd.an increase in demand, and no change in supply or quantity supplied
Solution
The correct answer is c. An increase in demand, and an increase in the quantity supplied.
Here's why:
When there are favorable health trends towards bananas, more people want to buy bananas. This increases the demand for bananas.
An increase in demand, according to the law of demand, will lead to an increase in the price of bananas, assuming the supply remains constant.
However, when the price of bananas increases, the suppliers are willing to supply more bananas to the market to maximize their profits. This is known as the law of supply.
So, the increase in demand leads to an increase in the quantity supplied, not an increase in supply. The supply would only increase if the suppliers are able to produce more bananas, not because they are willing to sell more at a higher price.
Therefore, the correct answer is c. An increase in demand, and an increase in the quantity supplied.
Similar Questions
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