A Small Increase or Decrease in Consumer Demand Can Produce

question 31

Multiple Choice

A small increase or decrease in consumer demand can produce a much larger change in demand for the facilities and equipment needed to manufacture the consumer product.What is this a result of?

• A)the demand fluctuation principle
• B)the joint demand principle
• C)the inelastic demand effect
• D)the multiplier effect

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Definitions:

Nonexcludable

A characteristic of a good or service indicating that it is not possible to prevent non-paying customers from accessing it.

Excludable

A property of a good whereby it is possible to prevent individuals from enjoying the good unless they pay for it.

Public Good

A good or service offered to every member of a society for free, provided by either governmental bodies or private entities or individuals, without seeking to make a profit.

Demand Curve

An illustrated chart that displays the connection between a product's price and the amount consumers are willing to buy at those price levels.