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Chapter 3: Q. c - For Critical Thinking (page 57)

What has happened to the position of the U.S. market demand curve for

chewing gum?Explain briefly.

Short Answer

Expert verified

A change in preferences of consumers led to fall in demand.

Step by step solution

01

Step1. Given information

Dentists convince the people that chewing gum is not healthy for the teeth.

02

Step2. Explanation

Since, people's preferences and taste changed and they now believe chewing gum is not healthy, this led to the leftward shift of the demand curve indicating a fall despite of no changes in the price.

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Most popular questions from this chapter

Consider the market for paperbound economics textbooks. Explain whether the following events would cause an increase or a decrease in supply or an increase or a decrease in the quantity supplied.

a. The market price of paper increases.

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Consider the following diagram of a market for one-bedroom rental apartments in a college community.

a. At a rental rate of \(1,000 per month, is there an excess quantity supplied, or is there an excess quantity demanded? What is the amount of the excess quantity supplied or demanded?

b.If the present rental rate of one-bedroom apartments is\)1,000 per month, through what mechanism will the rental rate adjust to the equilibrium rental rate of\(800?

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Has the market supply curve in China shifted rightward or leftward?Explain
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