Question:
Which one of the following will most likely to happen in the market for good X if the price of good X decreases when other things remain unchanged?
(1) The supply of good X will decrease.
(2) The demand for good X will increase.
(3) The demand for good X will decrease.
(4) The quantity demanded for good X will increase.
(5) The quantity supplied for good X will increase.
Correct Answer:
(4)
Answer Explanation:
A change in a product’s own price causes a movement along the existing demand curve, not a shift of the curve itself. According to the Law of Demand, a decrease in price leads to an increase in the “quantity demanded.”
Topic: Demand Theory Year: 2018
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