The Law of Demand Indicates That

question 181

Multiple Choice

The law of demand indicates that

• A) every physical good has a use.
• B) when people want a good badly enough, they will find a way to pay for it.
• C) the desire for a good is unrelated to its price.
• D) the quantity of a good that people will buy is inversely related to the price of the good.

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Definitions:

Long-run Average Cost

The per-unit production cost when all factors of production, including capital, are variable, and the scale of production can be changed.

Output Units

Quantitative measures representing the amount of goods or services produced by a company or an economic system.

Constant Returns to Scale

A situation where increasing all inputs by the same proportion results in output increasing by that same proportion, indicating linear scalability of production processes.

Economies of Scale

Refers to the cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.