Which of the Following Would Cause Price to Decrease

question 59

Multiple Choice

Which of the following would cause price to decrease?

• A)a decrease in supply
• B)an increase in demand
• C)a surplus of the good
• D)a shortage of the good

---

Definitions:

Diminishing Returns

An economic principle where the addition of a variable factor to a fixed factor leads to a decrease in the marginal output of the variable factor beyond a certain point.

Variable Factors

Components of production that can be adjusted in the short term to change the output level, such as labor and raw materials.

Economies of Scale

A situation where the cost of producing one unit of a good decreases as the volume of production increases.

Diseconomies of Scale

The phenomenon where, beyond a certain point, the cost per unit increases as a company continues to grow in size and output.