Between 2000 and 2015, the Price of a PC Fell

question 436

Multiple Choice

Between 2000 and 2015, the price of a PC fell and the quantity of PCs sold increased. Which of the explanations below is consistent with these facts?

• A) The demand for PCs increased by more then the supply of PCs increased.
• B) The supply of PCs increased by more than the demand for PCs increased.
• C) The demand for PCs decreased by more than the supply of PCs increased.
• D) Both the supply of PCs and the demand for PCs decreased.

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Definitions:

Product

An item offered for sale which can be a good, a service, or an idea.

Supply

The total quantity of a good or service that is available for purchase at various price levels in a given market.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a specific price level, at a given point in time.

Equilibrium Price

is the price at which the quantity demanded of a good equals the quantity supplied, leading to market balance.