ECONOMICS
SUPPLY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Decreased production of a related good that is not as valuable in a market
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Major bucks for people who sell that good! #makeitrain
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Increased production of the good that can be sold for higher prices
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orange+blue are BOTH correct!
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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: -Two goods are substitutes if an increase in the price of one causes an increase in the demand for the other. Two goods are complements if an increase in the price of one causes a decrease in the demand for the other.
Detailed explanation-3: -A surplus exists when the price is above equilibrium, which encourages sellers to lower their prices to eliminate the surplus. A shortage will exist at any price below equilibrium, which leads to the price of the good increasing.
Detailed explanation-4: -The law of demand states that a higher price leads to a lower quantity demanded and that a lower price leads to a higher quantity demanded.