If the normalization of trade relations between the U.S.and Cuba legalizes the sale of Cuban cigars in our country,it would

A) increase equilibrium price and decrease equilibrium quantity for Cuban cigars.
B) decrease equilibrium price and increase equilibrium quantity for Cuban cigars.
C) increase both the equilibrium price and quantity for Cuban cigars.
D) decrease both the equilibrium price and quantity for Cuban cigars.

Question

Nasim Jenkins · Accepted Answer

Final Answer : B, Explanation :  The legalization of the sale of Cuban cigars in the U.S. would increase the supply of cigars in the market, leading to a shift to the right in the supply curve. As a result, the equilibrium price of Cuban cigars would decrease, and the equilibrium quantity would increase. Therefore, the best choice is B, which states that the legalization would decrease the equilibrium price and increase the equilibrium quantity for Cuban cigars.

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