If consumers are presented with strong scientific evidence t

If consumers are presented with strong scientific evidence that a diet including

moderate red wine consumption leads to lower rates of heart disease, which of the

following changes is likely to occur?

a. an increase in red wine prices

b. an increase in white wine prices

c. a decrease in brie cheese prices

d. a decrease in grape prices

e. an increase in beer prices

Solution

Option A is correct

Prices depend on demand and supply.

When the people get assured that consuming red wine can lower their risk to heart diseases.

Their willingness to buy that particular good at any price increases.

We know that price is a reflection of how willing People are to buy the good

Therefore as the demand increases, the suppliers of red wine will take advantage of this Excess demand and increase the prices of the red wine greatly in demand by the people

There by increasing their profits.