00:01
Okay, we're asked what could cause an increase in demand that would lead to an increase in output and an increase in price.
00:16
The choices are not listed, so i will go through some potential things, and hopefully that will help you figure out which of the actual choices for your question apply.
00:29
So if we get an increase in demand, that means for any given price, people want to buy more.
00:37
So it could be something like a beneficial news story comes out, beneficial news that makes people want to consume more of this product.
00:57
Let's say the product is tea and a study comes out that says tea is more healthy for you than we previously thought.
01:04
That would cause the demand curve to shift out.
01:07
Another thing, maybe incomes increased.
01:14
There's some kind of exogenous shock to the economy and people's incomes went up.
01:19
And this good is a normal good.
01:22
A normal good is one for which the demand increases if income goes up.
01:31
So demand goes up...