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Question
How does the market demand reflect the law of demand?
a. As the price increases, each and every buyer purchases a larger quantity of the product.
b. As the price decreases, each and every buyer purchases a larger quantity of the product.
c. As the price increases, each and every buyer initially purchases a larger quantity of the product but eventually purchases less.
d. As the price decreases, each and every buyer initially purchases a larger quantity of the product but eventually purchases more.
e. The market demand curve does not reflect the law of demand.
Answer
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Related questions
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a. He or she will substitute away from the product.
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d. When a binding price ceiling exists, he or she will be willing to pay a lower price.
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What is the long-run consequence of a price ceiling law?
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b. A surplus will continue to exist and will grow smaller over time.
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Suppose Solomon lives in a community with no price controls. What do you expect will happen if his town borders a community where there is a binding price ceiling on most products?
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