If Consumer Preference for a Product Increases, This Will Cause

question 148

True/False

If consumer preference for a product increases, this will cause the equilibrium price of the product to go down, and the equilibrium quantity of the product to go up.

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Definitions:

Returns to Scale

The rate at which output increases as a result of proportionately increasing all inputs in the production process.

U.S. Carpet Industry

The sector of the United States economy that is involved in the manufacturing, distribution, and sale of carpets and rugs.

Large Firms

Companies that operate on a large scale, often characterized by significant market share, extensive operations, and substantial revenue.

Decreasing Returns

A situation in which the addition of more units of input results in the less-than-proportional increase in output.