Answer to Question #74449 in Microeconomics for talatoka vuicuvu

Question

what happens to the price and quantity of a product when it is banned from being sold in certain arears

Answer 1

If a product is banned in certain areas then usually its price and quantity demanded will be declined in the market. The reason behind this is the expected negative impact of product ban on customers’ mind set and perception towards this product that can its demand in the market. This situation can ultimately result as decrease in the selling price of this product. Overall, it can say that the impact on price and quantity depends on the main reason behind the ban of a particular product in certain areas.


Source:
Boyes, W. and Melvin, M. (2013) Fundamentals of Economics. 6th edn. USA: Cengage Learning.