Log in
Economics
1
answer
0
watching
284
views
22 Aug 2019

According to the law of demand, what will happen as the price of a good or service decreases?

 

a. The demand for that good or service will decrease.

b. The demand for that good or service will increase.

c. The quantity demanded for that good or service will decrease.

d. The quantity demanded for that good or service will increase.

Watch
1
answer
0
watching
284
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in
Share

Related textbook solutions

Principles of Economics
2nd Edition, 2017
Openstax
ISBN: 9781947172364
Principles of Macroeconomics
2 Edition,
Openstax
ISBN: 9781947172388
Principles of Microeconomics
2 Edition,
Openstax
ISBN: 9781947172340

Related questions

Discussion #1

The law of demand states that a fall in the price of a good raises the quantity demanded, and the increase in price leads to a decrease in quantity demanded. The price elasticity of demand measures the responsiveness of the quantity demanded to a change in price. Demand for a good is said to be elastic if the quantity demanded responds substantially to changes in the price, and the percentage change in quantity demanded is greater than the percentage change in price. Demand is said to be inelastic if the quantity demanded responds only slightly to changes in the price, which indicates that the percentage in price is greater than the percentage in quantity demanded.

However, the extent of responsiveness of quantity demanded to a change in price depends on the nature of a particular good or service in the market. The price elasticity of demand partly depends on the availability of close substitutes. When a large number of substitutes are available, consumers respond to a higher price of a good by buying more of the substitute goods and less of the relatively more expensive good. In addition, goods or services that are considered necessities tend to have less elastic (more inelastic) demand, whereas goods or services that are considered luxuries have more elastic (less inelastic) demands.

  • Explain why the demand for the good or service provided by the organization you work for is elastic or inelastic. How does this influence pricing decisions?
  • Provide examples on how the availability of close substitutes affects price elasticity of demand.
  • Give specific examples of necessities or luxuries, and explain how they affect price elasticity of goods or services.

Please answer ALL bulletins and place the answers under the correct bulletin.

The concept of demand is best described as:

A. The total satisfaction that consuming a good provides people at different prices.
B. The quantity of a good or service that people want to purchase at different prices.
C. The quantity of a good or service that people will offer for sale at different prices.

1) If a good has a price elasticity of demand of -3, it implies that:

if the price of the good increases by 1%, the quantity demanded of the good will decrease by 3%.
if the price of the good increases by 3%, the quantity demanded of the good will increase by 1%.
if the income of the consumer increases by 3%, the quantity demanded of that good will increase by 1%.
if the income of the consumer increases by 1%, the quantity demanded of that good will increase by 3%.

2) Which of the following goods is likely to have the lowest price elasticity of demand?

Life-saving drugs
Chocolates
Potato chips
Decorative flowers

Weekly leaderboard

Home
Homework Help 3,900,000
Economics 400,000
Start filling in the gaps now
Log in