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Commerce · Q721

Economics

Graduate and Post Graduate · Commerce · question 721

Q721

An improvement in technology lowers the cost of producing coffee. At the same time, the consumer's preference for coffee increases. The equilibrium price of coffee will

A.
Rise, fall or stay, depending on the relative size of the shifts in the demand and supply curves
Answer
B.
Remain the same
C.
Fall
D.
Rise

Answer: Option A

Solution

Answer: Option A
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