ECONOMICS
DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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If the price is expected to rise, quantity demanded will decrease.
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If the price is expected to fall, quantity demanded will decrease.
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If the price is expected to rise, quantity demanded will rise.
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Future price is not related to current demand.
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Detailed explanation-1: -If the price goes up, the quantity demanded goes down (but demand itself stays the same). If the price decreases, quantity demanded increases. This is the Law of Demand. On a graph, an inverse relationship is represented by a downward sloping line from left to right.
Detailed explanation-2: -The quantity demanded is an amount per unit of time. For example, the amount per day or per month. Other things remaining the same, • If the price of good rises, the quantity demanded of that good decreases. If the price of a good falls, the quantity demanded of that good increases.
Detailed explanation-3: -Because buyers have finite resources, their spending on a given product or commodity is limited as well, so higher prices reduce the quantity demanded. Conversely, demand rises as the product becomes more affordable. As a result, demand curves slope downward from left to right, as in the chart below.