ECONOMICS
DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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decreases
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reverses
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increases
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remains the same
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Detailed explanation-1: -Economists call this the Law of Demand. 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.
Detailed explanation-2: -The decrease in demand causes excess supply to develop at the initial price. a. Excess supply will cause price to fall, and as price falls producers are willing to supply less of the good, thereby decreasing output.
Detailed explanation-3: -Demand Increase: price increases, quantity increases. Demand Decrease: price decreases, quantity decreases. Supply Increase: price decreases, quantity increases.
Detailed explanation-4: -Quantity demanded is affected by the price of the product. If the price goes up, the demand will go down. If the price goes down, demand will go up. Price and demand are inversely related in this way.
Detailed explanation-5: -Demand is generally considered to slope downward: at higher prices, consumers buy less. The point at which the two curves intersect represents the market-clearing price-the price at which demand and supply are the same.