ECONOMICS
SCARCITY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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go down
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go up
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stay the same
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neither
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Detailed explanation-1: -The increase in demand causes excess demand to develop at the initial price. a. Excess demand will cause the price to rise, and as price rises producers are willing to sell more, thereby increasing output.
Detailed explanation-2: -a) As the price declines, the real income of the consumer increases. This statement is true because a decrease in price increases the purchasing power of the consumer. Suddenly, the consumer can afford more of the products so the demand for it increases.
Detailed explanation-3: -If the demand increases, and the supply remains the same, there will be a shortage, and the price will increase. If the demand decreases, and the supply remains the same, there will be a surplus, and the price will go down.