Rice and potatoes are substitutes in consumption.If the price of rice rises and there is a bumper crop of potatoes,in the market for potatoes one would expect the equilibrium price to _ and the equilibrium quantity to _.

A) fall,rise,or stay the same;rise
B) rise;fall
C) fall;fall
D) rise;fall,rise,or stay the same

Question

Rice and potatoes are substitutes in consumption.If the price of rice rises and there is a bumper crop of potatoes,in the market for potatoes one would expect the equilibrium price to _____ and the equilibrium quantity to _____.

A) fall,rise,or stay the same;rise
B) rise;fall
C) fall;fall
D) rise;fall,rise,or stay the same

Julian Flanigan · Accepted Answer

Final Answer : A, Explanation :  If the price of rice rises, some consumers may switch to buying cheaper potatoes, increasing the demand for potatoes and pushing up the equilibrium quantity. However, the bumper crop of potatoes will increase the supply of potatoes, which will put downward pressure on the equilibrium price. Therefore, it is possible that the equilibrium price will fall or stay the same, but we can be certain that the equilibrium quantity will rise due to the increase in supply. Hence, option A is the correct answer.

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