When consumers in a market become fully informed of negative information about the product, we can expect the
A) price of the product to decrease.
B) price of the product to increase.
C) price of the product to remain constant but the equilibrium quantity to decrease.
D) equilibrium quantity of the product to increase.

Question

Quizplus · Accepted Answer

When consumers become fully informed of negative information about the product, the demand for the product decreases. This shift in demand causes a decrease in the equilibrium price of the product since there is excess supply. Therefore, we can expect the price of the product to decrease.

When Consumers in a Market Become Fully Informed of Negative