Question

Q. What will happen to the equilibrium price and quantity of French fries in each of the
following cases? You should state whether demand or supply (or both) have shifted and in
which direction. (In each case assume ceteris paribus.)
(a) A rise in the price of oil;
(b) A rise in the demand for burgers;
(c) A rise in the price of potatoes;
(d) An expected rise in the price of potatoes in the near future;
(e) A tax on fries' production;
(f) The invention of a new, but expensive, process for removing all cholesterol from fries
plus the passing of a law which states that all fries producers (like fast food chains) must
use this process.

Answer 1

Answer:

Option ( f )

The invention of a new, but expensive, process for removing all cholesterol from fries.