In Economic Terms, to Say That There Has Been an Increase

question 289

Multiple Choice

In economic terms, to say that there has been an increase in demand for a product means that:

• A) the demand curve has shifted to the left.
• B) the product's price has fallen and as a result consumers are buying a larger quantity of the product.
• C) the product has become scarce for some reason.
• D) consumers are now willing to purchase more of the product at each possible price.

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Definitions:

Monopolistic Competition

A market structure in which many firms sell products or services that are similar but not identical, allowing for some degree of market power and product differentiation.

Non-price Competition

A strategy where businesses compete on factors not related to price, such as product quality, service, or brand reputation.

Horizontal Demand Curve

A horizontal demand curve represents a situation in economics where the demand for a product is perfectly elastic, meaning consumers would buy an infinite quantity at a certain price but none if the price increases.

Long-run Equilibrium

A state in economics where all factors of production and economic inputs are fully utilized, leading to a steady-state economy with no tendency for change in the absence of external shocks.