Asked by
Alisa Phoumin
on Nov 25, 2024
Verified
An increase in the price of a product will reduce the amount of it purchased because
A) the higher price will signal to consumers that the good is of low quality.
B) the higher price means that real incomes have risen.
C) consumers will substitute other products for the one whose price has risen.
D) consumers substitute relatively high-priced for relatively low-priced products.
Substitute Products
Products that can serve as replacements for each other; when the price of one increases, the demand for the substitute is likely to increase.
Price
The charge in currency projected, demanded, or provided in recompense for something.
Purchased Amount
The total volume or quantity of goods or services bought.
- Ascertain the impact of pricing fluctuations on the demanded quantity of merchandise and explore the connections between different categories of goods such as complements, substitutes, normal goods, and inferior goods.
- Distinguish between the concepts of income effect and substitution effect.
Verified Answer
MH
Learning Objectives
- Ascertain the impact of pricing fluctuations on the demanded quantity of merchandise and explore the connections between different categories of goods such as complements, substitutes, normal goods, and inferior goods.
- Distinguish between the concepts of income effect and substitution effect.