Final answer:
An increase in the price of RTIC coolers would typically result in a decrease in market demand, as consumers may seek alternatives or forgo the product.
Step-by-step explanation:
When RTIC increases the price of its coolers, this typically leads to a change in the market for those coolers. According to the law of demand, as the price for a good increases, the quantity demanded of that good typically decreases, all else being equal. This is because consumers may look for cheaper alternatives or decide they can do without the product at the higher price point. Thus, the correct answer is Option 1: Market demand decreases. It's important to note that 'market demand' refers to the total quantity demanded across all consumers at various price points and should not be confused with sales or revenue generated by selling the product.
To understand the broader context, in any product market or labor market, the following changes can achieve:
- An increase in demand typically results in a higher equilibrium price and a larger equilibrium quantity, as the demand curve shifts to the right.
- A decrease in demand results in a lower equilibrium price and a smaller equilibrium quantity, as the demand curve shifts to the left.
- An increase in supply leads to a lower equilibrium price and a larger equilibrium quantity, as the supply curve shifts to the right.
- A decrease in supply leads to a higher equilibrium price and a smaller equilibrium quantity, as the supply curve shifts to the left.