Answer to Question #327287 in Microeconomics for Anonymous

Question

Since one of the actors in a popular television series has been spotted wearing pink sun glasses, pink sun glasses is a must for every fashion conscious person. At the same time, a technological innovation reduces the costs of producing pink sun glasses. As a result, the equilibrium price of pink sun glasses will:

1.decrease and equilibrium quantity will either increase, decrease, or stay the same.

2.either increase, decrease, or stay the same, and equilibrium quantity could also either increase, decrease, or stay the same.

3.increase and equilibrium quantity will either increase, decrease, or stay the same.

4.either increase, decrease, or stay the same, and equilibrium quantity will increase.

Answer 1

1. decrease and equilibrium quantity will either increase, decrease, or stay the same.