O lower it by a relatively small amount D Question 28 1 pts Assume that the pric
ID: 1128939 • Letter: O
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O lower it by a relatively small amount D Question 28 1 pts Assume that the price of rubber increased at the same time that Michael Jordan, arguably the best NBA basketball player of all time, became famous. What do you expect to happen to the equlibrium price and equilibrium quantity of the basketball shoes that are promoted by Michael Jordan? O Equilibrium price will go up and equilibrium quantity will go down. O Equilibrium price will go up and equilibrium quantity will go up. O Equilibrium price will go down and equilibrium quantity will be indeterminate. O Equilibrium price will go down and equilibrium quantity will go up. O Equilibrium price will go up and equilibrium quantity will be indeterminate. 1 pts D Question 29 for the following questions.Explanation / Answer
Since rubber is an input for the production of the shoes and prices of rubber has increased, so it is less profitable to produce the shoes. Therefore producer produce less quantity of shoes, so the supply curve of the shoes shift leftwards. This lead to increase in prices and decrease in the quantity.
On the other hand, Michael Jordan, became a famous basket ball player and he advertise the shoes, so the demand for shoes increase, as a result demand curve shift rightward and this lead to definitely increase in the price but it is not fix either quantity will increase, decrease or remain same. It will depend on the magnitudes of shift of the both curve. Therefore quantity is indeterminate.
Hence option fifth is the correct answer.
Option fifth ; price will go up but the quantity will be indeterminate.
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