Podcast
Questions and Answers
What happens to quantity demanded when price increases, according to the law of demand?
What happens to quantity demanded when price increases, according to the law of demand?
- It increases
- It remains constant
- It fluctuates randomly
- It decreases (correct)
Which of the following factors does NOT affect the demand for a product?
Which of the following factors does NOT affect the demand for a product?
- Price of the product (correct)
- Price of substitute goods
- Consumer preferences
- Income of consumers
If the price of smartphones decreases, what is likely to happen to the demand for smartphone cases?
If the price of smartphones decreases, what is likely to happen to the demand for smartphone cases?
- It increases (correct)
- It decreases
- It has no relation to the price of smartphones
- It remains constant
Flashcards
Law of Demand
Law of Demand
The quantity demanded of a good falls when the price of the good rises.
Demand Curve Shifters
Demand Curve Shifters
A product's own price does NOT shift its demand curve; it causes movement along the curve.
Complementary Goods
Complementary Goods
When the price of a complementary good (like a smartphone) decreases, demand for the related good (smartphone case) increases.
Study Notes
Law of Demand
- When price increases, quantity demanded decreases, ceteris paribus (all other things being equal).
Factors Affecting Demand
- Several factors can affect the demand for a product, but one factor that does not affect demand is a change in the price of the same product.
Price of Complementary Goods
- If the price of a complementary good (e.g., smartphones) decreases, the demand for another complementary good (e.g., smartphone cases) is likely to increase.
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