Question

Due to ideal growing conditions in New Zealand vineyards and an overabundance of​ grapes, the price of Sauvignon Blanc wine decreases dramatically. Which of the following is likely to occur as a​ result?

A.
The quantity demanded will decrease.
B.
The demand will remain constant.
C.
The quantity demanded will increase.
D.
The equilibrium price will remain constant but the market price will increase.
E.
There will be no changes in supply or demand.

Answer 1

Answer: C.The quantity demanded will increase

Step-by-step explanation: Change in the demand occurs due to a change in factors affecting demand other than the price. While, a change in quantity demanded occurs due to a change in the price of the product other things constant.

As price of Sauvignon Blanc wine decreases dramatically the quantity demanded for Sauvignon Blanc wine must increase. Thus, the correct option is Quantity demanded will increase.