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CFA Level 1
Economics

Impact of Increased Demand on Equilibrium

Hard Microeconomics Demand And Supply Analysis

Imagine a local market for organic tomatoes. The current market price is $3 per pound, where buyers are willing to purchase 100 pounds and sellers are willing to sell 80 pounds at this price. A local newspaper publishes an article indicating that the health benefits of organic foods have been scientifically proven, leading to a surge in consumer interest.

Using your knowledge of demand and supply analysis, determine what will likely happen in the market for organic tomatoes in response to this increased consumer interest.

Hint

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