Answer to Question #210548 in Economics for Paballo

Question

This question is based on the following diagram of the market for ground beef.

Consider the market for ground beef is initially in equilibrium at Point J. Assume that ground beef is an inferior good. Which of the following could explain a movement to a new equilibrium at Point M?

A. a change in tastes away from hamburgers combined with an increase in the price for cattle feed

B. an increase in buyers' incomes combined with a cost-saving technological improvement

C. a decrease in the price of hotdogs combined with an increase in the price for labour

D. a decrease in buyers' incomes combined with a decrease in the number of acres owned by cattle ranches

Reset Selection

Answer 1

A change in tastes away from hamburgers combined with an increase in the price for cattle feed may be shown as a move to the point M with lower quantity demanded.

So, the correct answer is A.