question 7\n1 pts\nthe popularity of indoor hammocks has increased as people seek unique ways to relax. at…

question 7\n1 pts\nthe popularity of indoor hammocks has increased as people seek unique ways to relax. at the same time, the cost of producing indoor hammocks has fallen. based on this information, what is the change in the equilibrium price and quantity of indoor hammocks?\nequilibrium price is indeterminate but equilibrium quantity increases.\nequilibrium price decreases but quantity increases.\nequilibrium price rises but quantity is indeterminate.\nequilibrium price and quantity both increase.

question 7\n1 pts\nthe popularity of indoor hammocks has increased as people seek unique ways to relax. at the same time, the cost of producing indoor hammocks has fallen. based on this information, what is the change in the equilibrium price and quantity of indoor hammocks?\nequilibrium price is indeterminate but equilibrium quantity increases.\nequilibrium price decreases but quantity increases.\nequilibrium price rises but quantity is indeterminate.\nequilibrium price and quantity both increase.

Answer

Brief Explanations:

The increase in popularity means higher demand (right - shift of the demand curve). The fall in production cost leads to an increase in supply (right - shift of the supply curve). When both demand and supply increase, the equilibrium quantity definitely increases. However, the change in equilibrium price depends on the magnitudes of the shifts of the demand and supply curves. So, the equilibrium price is indeterminate.

Answer:

Equilibrium price is indeterminate but equilibrium quantity increases.