The cost of producing aspirin increases simultaneously as doctors find that one aspirin per day reduces the risk of heart attacks. The supply of aspirin ________ and the demand for aspirin ________ so that the equilibrium price of aspirin ________.

Question

Quizplus · Accepted Answer

The cost of production increasing leads to a decrease in supply (since it's more expensive to produce the same amount), and the discovery of health benefits increases demand. When demand increases and supply decreases, the equilibrium price rises.

The Cost of Producing Aspirin Increases Simultaneously as Doctors Find