Question

A recent medical study reports new benefits of cycling. Simultaneously, the price of the parts needed to make bikes falls. The demand curve would _________ and the supply curve would__________

Answer 1

The demand curve would shift to the right and the supply curve would shift to the right

Step-by-step explanation:

There will be a right shift in demand curve when there is an increase in demand, while there will be a right shift in supy curve when there is an increase in number of sellers or suppliers.

Here, a new medical study reports the benefits of cycling, and the price of parts needed to make bikes fall simultaneously, it is believed that the demand for bikes would increase.

Also, considering the fact that parts needed to produce bikes fall, there would likely be more producers of bike and this will also increase the supply of bikes.

Therefore, since there would be an increase in demand and supply of bikes, the demand curve for bikes would shift to the right and the supply curve would also shift to the right.