People have become more concerned about the negative health effects of eating carbohydrates and fat. Considering these effects only, which of the following best describes the likely effect of this trend on the market for high-carb, high-fat snacks? A. Demand shifted to the left leading to a decline in equilibrium price and quantity. B. Quantity demanded fell leading to a decline in equilibrium price and quantity. C. Supply shifted to the left leading to a rise in equilibrium price and a decline in equilibrium quantity. D. Demand and supply both shifted to the left leading to a decline in equilibrium price and quantity.

Question

Hillary Stanley

Business

10 April, 21:27

People have become more concerned about the negative health effects of eating carbohydrates and fat. Considering these effects only, which of the following best describes the likely effect of this trend on the market for high-carb, high-fat snacks? A. Demand shifted to the left leading to a decline in equilibrium price and quantity. B. Quantity demanded fell leading to a decline in equilibrium price and quantity. C. Supply shifted to the left leading to a rise in equilibrium price and a decline in equilibrium quantity. D. Demand and supply both shifted to the left leading to a decline in equilibrium price and quantity.

+2

Answers (2)

Know the Answer?

Alessandra Barber · Answer 1

A. Demand shifted to the left leading to a decline in equilibrium price and quantity.

Aldo Andersen · Answer 2

Demand shifted to the left leading to a decline in equilibrium price and quantity.

Explanation:

To properly understand the scenario under study, it is important to define some key terms:

- Demand of a product or commodity is the willingness of an able buyer to seek out for such commodity or product. Demand is inversely proportional to price, also.

- Supply is simply the availability of commodity and/or product item for an interested buyer or consumer. Supply is directly proportional to price.

The two concepts above and the manner in which they relate and combine have come to determine what price is to be set for a commodity.

- Equilibrium Price is simply the price at which the rate of products demanded is on the same frequency with the availability of said products.

Demand and supply either moves to the left or right. Both occasioning an increase or decrease. Given the situation, there's now a marked reduction in high carb consumed. This is same for high fat consumed.

The implication of the new distaste for high carb and fat has thus reduced the consumer's willingness to buy such - Reduction in Demand. A student should observe that there is a difference between Demand and quantity demanded. And for the purpose of this study, demand is what is applicable.

The implication of the foregoing is that demand has shifted to the left - reduced, leading to a decrease in equilibrium price and quantity. The is the way market forces react in such.

Note: nominal price of a product is different from it's equilibrium price that can only be derived from combination of Supply and Demand.