Answer to Question #95466 in Microeconomics for Obenewaa

Question

Candy makers accurately anticipate the increase in demand for candy for Halloween so that the supply of candy and demand for candy increase the same amount. What happens to the price of candy and the quantity of candy?

Answer 1

Price of candy is likely to fall to a lower price since there will be a high quantity of candy due to an increase in supply of candy in the market.This will lead to a high demand for candy by the customers.

The price of candy will rise due to an increase in the demand for candy since, more customers are willing to buy at the prevailing prices. Also this will encourage the suppliers to produce more of the candy.