Question

Suppose that there has been an increase in the price of pork. What effect will this have on the market for beef?

a. It will increase both the demand and supply of beef
b. It will decrease the supply of beef, as a consequence the quantity of beef demanded will go down.
c. It will decrease both the demand and supply of beef because beef and pork are complements.
d. It will increase the demand for beef and the quantity supplied will increase.

Answer 1

An increase in the price of pork, will affect on the market of beef in a way that it will increase the demand for beef and the quantity supplied will increase. The correct answer is d.

Step-by-step explanation:

An increase in the price of pork, a substitute for beef, would likely cause consumers to shift away from purchasing pork and toward buying beef instead. This change in consumer preferences leads to an increased demand for beef, as consumers seek alternatives. However, this doesn't directly impact the supply of beef.

As demand rises due to the price increase of pork, producers are incentivized to supply more beef to meet the heightened demand. Therefore, both the demand for beef and the quantity supplied would increase in response to the price hike in pork, showcasing the direct relationship between the two goods in the market. Therefore, the correct answer is d.