Exhibit 13-4: Market for Healthy Hands Lotion
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In Exhibit 13-4, the makers of Healthy Hands Lotion discovered that the lotion can cause skin reactions, but it doesn't inform the buyers. A news investigation reveals the reactions. When the market reacts to this new information, the price will
A. increase from $4.00 to $5.00 and the quantity will increase from 40 to 50 units.
B. decrease from $5.00 to $4.00 and the quantity will decrease from 50 to 40 units.
C. increase from $4.00 to $6.00 and the quantity will remain constant at 40 units.
D. decrease from $6.00 to $5.00 and the quantity will increase from 40 to 50 units.
Answer: B
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