An Increase in the Demand for Lobster Due to Changes

question 150

Multiple Choice

An increase in the demand for lobster due to changes in consumer tastes, accompanied by a decrease in the supply of lobster as a result bad weather reducing the number of fishermen trapping lobster, will result in

• A)a decrease in the equilibrium quantity of lobster and no change in the equilibrium price.
• B)an increase in the equilibrium price of lobster and no change in the equilibrium quantity.
• C)an increase in the equilibrium price of lobster; the equilibrium quantity may increase or decrease.
• D)a decrease in the equilibrium quantity of lobster; the equilibrium price may increase or decrease.

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Definitions:

Demand Curve

This reflects how the quantity demanded of a good or service varies with changes in its price, typically sloping downward from left to right.

Network Externalities

The effect that additional users of a good or service have on the value of that product to others, where increased usage can enhance value.

Externality

An economic term referring to a side effect or consequence of an industrial or commercial activity that affects other parties without this being reflected in the cost of the goods or services involved.

New Edition

The latest version or release of a book, publication, or any media content, often updated with new information or corrections.