Which of the Following Situations Best Demonstrates the Law of Demand

question 140

Multiple Choice

Which of the following situations best demonstrates the law of demand?

• A) Movie-goers react to an increase in the price of a theater ticket by seeing fewer movies per year.
• B) Movie-goers see fewer movies per year due to an overall decrease in the quality of newly released motion pictures.
• C) A drought causes a decrease in the availability of pumpkins, resulting in fewer jack-o-lanterns displayed on Halloween.
• D) An increase in the number of people writing Economics textbooks results in a decrease in average textbook prices.

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Definitions:

Profit

The financial gain realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

U.S. Fishery

Pertains to the industry or activity of raising, harvesting, processing, and selling fish, shellfish, and aquatic plants in the United States.

Dollar Terms

Refers to financial transactions quoted in terms of the U.S. dollar.

ITQs

Individual Transferable Quotas, a regulatory tool used in managing resources by allotting specific quantities that can be harvested or produced, often applied in fisheries to prevent overfishing.