If the Price of a Commodity Increases, All Other Things

question 148

Multiple Choice

If the price of a commodity increases, all other things unchanged, you would expect the:

• A) demand to decrease.
• B) quantity demanded to increase.
• C) quantity demanded to decrease.
• D) demand curve to shift to the left.

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Definitions:

Marginal Cost

The increase in total cost that arises from producing one additional unit of a good or service.

Output Level

The total quantity of goods and services produced in an economy over a specified period.

Marginal Revenue

The additional income that is produced from selling one more unit of a good or service; a crucial concept in determining the optimal level of output for a firm.

Marginal Cost

The increase in cost resulting from the production of one additional unit of a product.