According to the Law of Demand, If the Price of Compact

question 46

Multiple Choice

According to the law of demand, if the price of compact disks decreased, ceteris paribus, the

• A)demand for compact disks would decrease.
• B)quantity demanded of compact disks would decrease.
• C)demand for compact disks would increase.
• D)quantity demanded of compact disks would not change.
• E)quantity demanded of compact disks would increase.

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Definitions:

Supplier Power

The ability of providers of goods or services to influence the terms and conditions of supply, affecting market prices and the competitiveness of buyers.

Entry Barriers

Obstacles that make it difficult to enter a particular market, which can include high startup costs, strict regulations, or strong competition.

Resource Heterogeneity

The principle that resources needed for production, such as labor, capital, and land, differ in their quality and composition across firms or economies.

Temporary Competitive Advantage

A situation where a firm gains an edge over its competitors for a short period due to unique resources or positioning.