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21 September, 2021

State, if any, the expectation of the law of demand

 The law of demand states that, if all other factors remain equal, the higher the price of a good, the less people will consume that good. In other words, the higher the price, the

lower the quantity demanded. This principle is illustrated when                        

 a) Company A has a monopoly over the widget market so an increase in widget price has little effect on the quantity demanded.

b) A manufacturer of luxury cars noticed that its customer base is relatively unresponsive to changes in price.

c) A city experiences an increase in both gasoline prices and the number of people taking public transportation.

d) An increase in the number of computer retailers led to decrease in the average price of computers.

e) A reduction in the price of oranges from $2 per pound to $1 per pound results in 75 pounds of oranges being sold as opposed to 50 pounds.