When the Price Level Falls,the Total Quantities of Goods and Services

question 177

Multiple Choice

When the price level falls,the total quantities of goods and services demanded:

• A) decreases.
• B) stays the same.
• C) increases.
• D) increases and then decreases.
• E) decreases and then increases.

---

Definitions:

Wasted Capacity

The portion of production capability or resources that goes unused or is not effectively utilized.

Margin Reduction

The decrease in the difference between the cost to produce a good or service and its selling price, often aiming to increase market competitiveness.

Backup Source

An alternative supplier or system used to ensure continuity in case the primary source fails or is unavailable.

Production Capacity

The maximum output that a manufacturing facility can produce under normal conditions, determined by available resources and constraints.