Suppose consumer tastes shift toward the consumption of apples. Which of the following statements is an accurate description of the impact of this event on the market for apples?

Question

a. There is a decrease in the quantity demanded of apples and an increase in the supply for apples.
b. There is an increase in the quantity demanded of apples and in the supply for apples.
c. There is an increase in the demand and supply of apples.
d. There is an increase in the demand for apples and a decrease in the supply of apples.
e. There is an increase in the demand for apples and an increase in the quantity supplied of apples.

Answer 1

The correct answer is:

e. There is an increase in the demand for apples and an increase in the quantity supplied of apples.

Here's the reasoning:

1. When consumer tastes shift toward the consumption of apples, it means that consumers want to buy more apples at every price level. This leads to an increase in demand for apples.

2. As the demand for apples increases, producers are likely to respond to the higher prices (due to increased demand) by supplying more apples. Therefore, there will also be an increase in the quantity supplied of apples as the market adjusts.

So, the accurate description is an increase in demand for apples and an increase in the quantity supplied of apples.