Podcast
Questions and Answers
What happens to the demand for a product when its price is very high?
What happens to the demand for a product when its price is very high?
- It remains the same as consumers are unaffected by price
- It increases because consumers are willing to pay more
- It decreases because consumers are limited by their ability to buy (correct)
- It depends on other factors such as income and taste
What is plotted on the vertical axis of a simple demand curve?
What is plotted on the vertical axis of a simple demand curve?
- The quantity of the good purchased
- The income of the consumer
- The price of the good (correct)
- The time period of the purchase
Why do suppliers increase the supply of a product when the price is high?
Why do suppliers increase the supply of a product when the price is high?
- Because they can maintain a profit despite higher production costs (correct)
- Because they cannot produce more due to limited capacity
- Because they want to reduce their profit margin
- Because they want to reduce their inventory
What happens to the desired rate of production when inventory is less than the desired inventory?
What happens to the desired rate of production when inventory is less than the desired inventory?
What is the result of a decrease in price on the interaction between supply and demand?
What is the result of a decrease in price on the interaction between supply and demand?
What assumption do economists make when analyzing the quantity of goods sold and purchased?
What assumption do economists make when analyzing the quantity of goods sold and purchased?
What are the two factors that determine demand according to economic theory?
What are the two factors that determine demand according to economic theory?
What happens to demand when the market price for a product is high?
What happens to demand when the market price for a product is high?
Why does the demand for a product at low prices have a limit?
Why does the demand for a product at low prices have a limit?
What happens to the amount of products that can be purchased with the same amount of money as the price increases?
What happens to the amount of products that can be purchased with the same amount of money as the price increases?
