Question 11 (1 point) Consider the market for running shoes....

Question 11 (1 point) Consider the market for running shoes. Demand increases and supply decreases. Which of the following is true? Price increases. The effect on quantity cannot be determined. Price decreases. The effect on quantity cannot be determined. Price increases. Quantity decreases. The effect on price cannot be determined. Quantity increases. Price decreases. Quantity decreases.

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00:01 So we've got a couple questions here.

00:02 So the first one is saying not a supply plus demand question.

00:12 So we're given a bunch of options.

00:14 Answer a, we're talking about quantity demanded, right? the quantity of output consumers are willing to purchase, that's just the definition of quantity demanded.

00:23 That is absolutely a story about supply and demand analysis.

00:28 B is quantity demand versus quantity supply.

00:34 Yes, again, that's absolutely something that you can understand using supply and demand analysis.

00:42 C and d, note that d is just quantity supply, the quantity of output that producers are willing to produce and sell at each possible market price.

00:50 That is, again, a part of supply and demand analysis.

00:53 So we've got the exception here.

00:57 C is max output independent of price.

01:08 This is the correct answer, right? this is not supply plus demand analysis.

01:14 Supply plus demand analysis says, based on price, what is the market going to do? if you ask questions where the firm reacts doesn't care about the price, supply and demand analysis can't say anything about that because supply and demand is all about the price.

01:31 So two is going to be about normal goods.

01:35 So we have a normal good.

01:40 Income goes up...

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