Answer to Question #262458 in Microeconomics for Tasneem Dawood

Question

Suppose that citizens of South Africa are advised by health authorities on the health benefits of consuming fresh ginger.

demonstrate and explain using a clearly labelled diagram, the effects of this information on the equilibrium price and equilibrium quantity of fresh ginger

Answer 1

The equilibrium price will increase from $p_1$ to $p_2$ while the equilibrium quantity will also increase from $q_1$ to $q_2$ . This happens because there would be an increase in demand for ginger that will cause the demand curve $D_1$ to shift rightwards to $D_2.$