Question

Let D​= ​demand, S​ = supply, P​ = equilibrium​ price, and Q​= equilibrium quantity. What happens in the market for walnuts if the Centers for Disease Control and Prevention announces that consuming a half cup of walnuts each week helps to lower bad levels of​ cholesterol?

Answer 1

Increased D, P and Q

Step-by-step explanation:

Assuming the agents are health conscious.

The immediate effect of this announcement will be an increased consumption of walnuts. This will mean that the demand curve for walnuts will shift outwards, increasing the quantity demanded D at any and all price levels. This increase in D also pushes up the price P and the equilibrium quantity of walnuts in the market Q.

As a result more walnuts are demanded and at an increased price raising the market equilibrium.

Hope that helps.