Answer to Question #24578 in Microeconomics for saad

Question

Silk shirts tend to be more popular among younger people than older people (let's assume - I'm no fashionista!). If the birth rate drops so that the balance between old and young people shifts toward having more older people, then the most likely effect in the market for silk shirts would be:


A. P* up, Q* down


B. P* up, Q* up


C. P* down, Q* down


D. P* down, Q* up


E. A movement to the right along the demand curve.

Answer 1

C. P* down, Q* down
Demographic changes greatly influence demand. An increase or decrease in the population of certain groups, such as teenagers or the elderly, will increase or decrease the demand for certain products.