The Law of Demand States That

question 37

Multiple Choice

The law of demand states that:

• A)other things remaining constant,price and quantity demanded are positively related.
• B)price is the only factor that influences the quantity that people are willing and able to buy.
• C)other things remaining constant,quantity demanded varies inversely with price.
• D)other things remaining constant,the demand curve shifts whenever the price of a good changes.
• E)by producing a product,firms create a demand for it.

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Definitions:

Output Level

The quantity of goods or services produced by a firm or economy over a certain period.

Marginal Revenue

The additional revenue a firm receives from selling one more unit of a product or service.

Marginal Cost

The expense associated with the next unit produced, emphasizing its role in production decisions and price setting.

Economic Profit

This is the difference between total revenue and total costs, including both explicit and implicit costs.