A Higher Price Reduces the Quantity Demanded for a Product

question 263

Multiple Choice

A higher price reduces the quantity demanded for a product because

• A) the purchasing power of individuals increases.
• B) the financial assets of individuals increase.
• C) individuals will buy more of the product and less of its substitutes.
• D) individuals can afford less of the product and will switch to substitutes.

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Definitions:

Insurance Policy

An agreement between an insurer and a policyholder that outlines coverage terms, conditions, and the duration the insurance coverage is in effect.

December 31

December 31 refers to the final day of the year in the Gregorian calendar, often associated with closing financial and business accounts for the year.

Credit Balance

A situation where the sum of credits in an account exceeds the sum of debits, often indicating a liability or revenue.

Unearned Revenue

Prepayment for goods or services which have not yet been delivered or performed, recognized as a liability on the balance sheet until the goods or services are delivered.