For a Given Increase in Supply, the Condition of Demand

question 49

Multiple Choice

For a given increase in supply, the condition of demand that will result in the most significant change in quantity is when demand is

• A)elastic.
• B)inelastic.
• C)perfectly elastic.
• D)perfectly inelastic.

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Definitions:

Say's Law

An economic theory that proposes supply creates its own demand, suggesting that producing goods and services will in turn generate sufficient demand for those goods and services.

Paradox Of Thrift

An economic theory suggesting that personal savings can be detrimental to overall economic growth if everyone saves more and spends less, leading to decreased aggregate demand.

American Economy

The economic system of the United States, characterized by a mixed economy that supports free market activities.

Closed System

A physical or economic system that does not interact with or exchange matter with its surroundings.