If We Observe a Decrease in the Price of a Good

question 130

Multiple Choice

If we observe a decrease in the price of a good and a decrease in the amount of the good bought and sold, this could be explained by a(an) :

• A) increase in the supply of the good.
• B) increase in the demand for the good.
• C) decrease in the demand for the good.
• D) decrease in the supply of the good.

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Definitions:

Marginal Revenue

The additional income earned by selling one more unit of a good or service; it can vary depending on the current level of output and market conditions.

Fourth Unit

Typically implies an incremental or additional unit in a sequence, often used in economics or logistics to discuss marginal utilities or effects.

Price Discrimination

The practice of charging different prices to different customers for the same product or service, based on factors like willingness to pay, location, or purchase volume.

Resell

The act of selling an item that one has previously purchased or acquired, potentially at a different price point.