The Increase in Quantity Demanded Due to a Price Reduction

question 181

Multiple Choice

The increase in quantity demanded due to a price reduction is a result of the _______ and the ________.

• A) budget effect; income effect
• B) income effect; demand effect
• C) substitution effect; income effect
• D) demand effect; budget effect

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Definitions:

Increase in Quantity

An increase in quantity refers to a rise in the number of units produced or sold of a particular good or service.

Demand

The amount of a particular product or service that consumers are willing and able to purchase at various prices.

Suppliers

Entities that provide goods or services to consumers or other businesses, often in exchange for financial compensation.

Frozen Food

Food products that have been subjected to rapid freezing and are kept frozen until used to extend their shelf life.