Question

A shoe factory sells a certain brand of shoes for $50 per pair. After a celebrity
is seen wearing the shoes at an awards show, demand for the shoes goes up
rapidly. As a result, the factory is able to increase the price to $300 per pair.
According to the law of supply, what would you expect to happen next?
O A. The factory would try to decrease demand for the shoes.
O B. The factory would try to increase its supply of the shoes.
O C. The factory would decrease the quantity supplied of the shoes.
O D. The factory would try to lower the equilibrium price for the shoes.

Answer 1

Answer:

B

Explanation:

The factory would most likely take advantage of this situation, and try to sell more of the shoes at a higher price, for the greater profit.

A,B and D do not make sense as the factory would then either be making less money or not profiting at all.

Answer 2

What would you expect to happen next is B. The factory would try to increase its supply of the shoes.

Based on the law of supply the  factory would tend to produce or manufacture more of the shoes as the demand for the shoes has .increased

Therefore The higher the demand for the shoes the higher the supply will be  which inturn means that the company will have to increase their production in order to meet the needs of their consumer.

This will lead to increase in profit for the company as they have increase the price of the shoes from $50 to $300 per pair due to increase in demand.

Inconclusion What would you expect to happen next is B. The factory would try to increase its supply of the shoes.

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