Suppose a scientific report states that fish contain dangerously high levels of
ID: 1223296 • Letter: S
Question
Suppose a scientific report states that fish contain dangerously high levels of mercury (toxic to humans). At the same time, the price of diesel fuel, used by fisherman to fuel their boats, falls. Based on this information, what is the effect on the market for fish? A. The demand curve shifts to the left and the supply curve remains stationary, causing a fall in both equilibrium price and quantity. B. The demand curve shifts to the left and the supply curve shifts to the right, causing a fall in equilibrium price. C. The demand curve shifts to the left and the supply curve shifts to the left, causing equilibrium quantity to fall. D. The demand curve shifts to the left and the supply curve shifts to the left, causing both equilibrium price and quantity to rise.
Explanation / Answer
Answer: B. The demand curve shifts to the left and the supply curve shifts to the right, causing a fall in equilibrium price.
Explanation: With other things remaining the same, the expectant result would be decrease in demand, increase in supply, fall in price, quantity change would be ambiguous
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