A famous athlete promotes a certain brand of clothing, and this increases the demand for that brand of clothing.



Which two things would be expected to happen next?



Select two correct answers.

  • The producer will decrease the supply.
  • The producer will increase the supply.
  • The price will go up.
  • The price will go down.

Verified Answer :

Final answer:

When a famous athlete promotes a clothing brand, the increase in demand will likely lead producers to increase the supply and the price of the clothing will rise. These responses occur to meet the higher consumer interest and willingness to pay for the product.


Explanation:

Effects of Increased Demand on Clothing Supply

When a famous athlete promotes a brand of clothing, it helps to increase the demand for that brand. In response to this increase in demand, two key outcomes can be expected:

  1. The producer will increase the supply. Producers tend to increase supply to meet the higher consumer demand. They may do this by ramping up production or expanding distribution.
  2. The price will go up. When demand exceeds supply, the price typically rises as consumers are willing to pay more for the desired clothing.

In contrast, a decrease in supply or a drop in price would typically not occur under these circumstances, as producers are incentivized to capitalize on the increased demand.


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