If Price Falls, What Happens to the Quantity Demanded for a Product

question 297

Multiple Choice

If price falls, what happens to the quantity demanded for a product?

• A) It increases.
• B) It decreases.
• C) It does not change.
• D) Uncertain--economic theory has no answer to this question.

---

Definitions:

Payee

The individual or entity to whom a payment is to be made or credited.

Allowance Account

A contra-asset account used to record adjustments to accounts receivable, reflecting the amounts expected not to be collected.

Uncollectible

Refers to accounts receivable that are considered to be uncollectable from debtors due to their inability to pay.

Credited

A term used in accounting to denote an increase in liabilities or equity accounts, or a decrease in assets or expense accounts.