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:

Sherman Act

A landmark federal statute in the United States antitrust law passed by Congress in 1890 that prohibits monopolistic practices and promotes competition.

Market Power

Refers to the ability of a company or entity to influence the price and output levels in a market.

Competitors Cooperate

A situation where businesses that usually compete against each other decide to work together towards a common goal or project.

Market Power

The ability of a company or entity to influence the price or availability of goods and services in a market.