Final answer:
An increase in the price of French wine would likely decrease the quantity demanded and could affect France's export competitiveness and trade balance, especially if demand for the wine is elastic.
Step-by-step explanation:
The question is concerned with the economic implications of an increase in the price of French wine. If other prices remain the same, an increase in the price of French wine would likely lead to a decrease in quantity demanded, as consumers may turn to substitutes. Additionally, if France is exporting wine, the higher price could lead to a decrease in its export competitiveness, potentially reducing the quantity of wine sold abroad. The scenario where French wine becomes more expensive could also have different effects, such as an increase in domestic consumption of alternative local products, like beer or spirits, or it could increase the demand for wines from other countries.
Furthermore, when considering international trade, if France is a significant exporter of wine, the increase in price could impact their trade balance. The increase in wine prices might be a result of various factors, such as higher production costs, which could be due to an increase in input costs like grapes, labor, or even environmental factors. It is also important to consider the elasticity of demand for French wine — if demand is inelastic, the quantity demanded may not significantly decrease, and French wine producers could actually see an increase in revenue.