Question

In the market for sushi, an increase in the price of fish along with an increase in the popularity of sushi among consumers will cause the equilibrium quantity to increase, but the effect on the equilibrium price is indeterminate.
(A) True
(B) False

Answer 1

Answer:

The correct answer is (B) False.

Explanation:

Naturally, the price and the amount of equilibrium depend on the position of the supply and demand curves. When an event displaces these curves, the market equilibrium changes. The analysis of this change is called comparative static, because it involves comparing the old balance with the new one.