Which of the Following Statements About the Demand for a Normal

question 9

Multiple Choice

Which of the following statements about the demand for a normal good is the most accurate?

• A) It decreases when price rises.
• B) It decreases when income falls.
• C) It increases when income falls.
• D) It increases when price rises.

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Definitions:

Price Floors

are government-imposed limits on how low a price can be charged for a product, with the aim to ensure fair compensation for producers.

Price Ceilings

Price Ceilings are government-imposed limits on how high a price can be charged for a product, service, or commodity, often implemented to protect consumers from excessively high costs but can lead to shortages.

Equilibrium Price

A price where the supplied goods quantity is identical to the demanded goods quantity.

Law Of Demand

An increase in a product’s price will reduce the quantity of it demanded, and conversely for a decrease in price.