Question

Kavan runs a small shoe company. He recently invested in a large supply of purple clogs, which he sells for $80 a pair. One night, a popular comedy show makes fun of people who wear purple clogs. How will this affect Kavan's clog sales?

Demand for the clogs will decrease, and market price will decrease.
Demand for the clogs will decrease, and market price will increase.
Demand for the clogs will increase, and market price will decrease.
Demand for the clogs will increase, and market price will increase.

Answer 1

Demand for the clogs will increase, and market price will increase.

Answer 2

Kavan runs a small shoe company. He recently invested in a large supply of purple clogs, which he sells for $80 a pair. One night, a popular comedy show makes fun of people who wear purple clogs. How will this affect Kavan's clog sales? Demand for the clogs will decrease, and market price will decrease. If less people want to buy the clogs, this means that demand is lower. With the demand lower, Kavan will need to lower the market price to sell more.