You are a producer of tortillas. In the market for tortillas, two events happen simultaneously: there is a decrease in the price of corn used to make your tortillas, and there are headlines that promote the link between eating tortillas and reducing heart attacks. Which of the following is a consequence?
A. There is a decrease in the price of tortillas and a decrease in the quantity of tortillas.
B. There is a decrease in the price of tortillas and an increase in the quantity of tortillas.
C. There is an increase in the price of tortillas and a decrease in the quantity of tortillas.
D. We know the quantity will increase, but we don't know what will happen to the price unless we know the size of the shifts.

The correct option is D

Explanation:

D. We know the quantity will increase, but we don't know what will happen to the price unless we know the size of the shifts.

Reason- Two events are-

1. There is a decrease in the price of corn used to make your tortillas and the charge of producing tortillas has declined. Thus, the supply enhances, and the supply curve will shift right.

2. There are headlines that promote the link between eating tortillas and reducing heart attacks. Resultantly, there is increase in demand for tortillas and the demand curve shifts right.

When both supply and demand increases, quantity increases for sure.

Price ↑ when ↑Supply < ↑Demand

Price ↓ when ↑ Supply > ↑ Demand

Price remains same when ↑ Supply = ↑ Demand

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