studies have shown that drinking one glass of red wine per day may help prevent heart disease. assume this…

studies have shown that drinking one glass of red wine per day may help prevent heart disease. assume this is true, and favorable weather has increased the grape harvest of california vineyards. in the market for red wine, these two developments would\n\na. increase demand and increase supply, resulting in an increase in the equilibrium quantity and an uncertain effect on the equilibrium price of red wine.\nb. increase demand and increase supply, resulting in an increase in both the equilibrium price and the equilibrium quantity of red wine.\nc. increase demand and decrease supply, resulting in an increase in the equilibrium quantity and a decrease in the equilibrium price of red wine.\nd. increase demand and increase supply, resulting in an increase in the equilibrium price and an uncertain effect on the equilibrium quantity of red wine.

studies have shown that drinking one glass of red wine per day may help prevent heart disease. assume this is true, and favorable weather has increased the grape harvest of california vineyards. in the market for red wine, these two developments would\n\na. increase demand and increase supply, resulting in an increase in the equilibrium quantity and an uncertain effect on the equilibrium price of red wine.\nb. increase demand and increase supply, resulting in an increase in both the equilibrium price and the equilibrium quantity of red wine.\nc. increase demand and decrease supply, resulting in an increase in the equilibrium quantity and a decrease in the equilibrium price of red wine.\nd. increase demand and increase supply, resulting in an increase in the equilibrium price and an uncertain effect on the equilibrium quantity of red wine.

Answer

Brief Explanations:

The positive health - related study will increase the demand for red wine as consumers are more likely to want it. The increased grape harvest will lower the cost of production for red - wine producers, leading to an increase in supply. When demand and supply both increase, the equilibrium quantity will definitely increase. However, the effect on the equilibrium price depends on the magnitudes of the shifts in demand and supply. If the increase in supply is larger than the increase in demand, the price will fall; if the increase in demand is larger, the price will rise; if they are equal, the price will remain the same. So the effect on price is uncertain.

Answer:

A. increase demand and increase supply, resulting in an increase in the equilibrium quantity and an uncertain effect on the equilibrium price of red wine.