Answer to Question #220786 in Microeconomics for klaus

Question

Global warming has had significant negative effects. But it has also had some positive effects. ln particular, wine-growing regions in several major producing countries have expanded, increasing the overall world supply of wine. But the demand for wine has also increased over this period. Use supply and demand curves to show what happens to price and quantity as a result of these two developments.

Answer 1

The price will rise from P1 to p2 as the quantity rises from Q1 to Q2.