At a Price of $5, Sam Buys 10 Units of a Product

question 12

Multiple Choice

At a price of $5, Sam buys 10 units of a product. When the price increases to $6, Sam buys eight units. Martha says Sam's demand has decreased. Is Martha correct?

• A) Yes, Martha is correct. Sam's demand has decreased.
• B) No, Martha is incorrect. Sam's demand has increased.
• C) No, Martha is incorrect. Sam's quantity demanded has decreased, and his demand has not changed.
• D) No, Martha is incorrect. Sam's quantity demanded has increased, and his demand has increased.

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Definitions:

Perpetual Scholarship

A scholarship fund that provides financial aid indefinitely, usually through an endowment that generates interest used to fund the scholarship.

Compounded Monthly

This refers to the calculation and addition of interest to the principal sum of a loan or deposit on a monthly basis.

Equal Monthly Payments

Fixed payments made every month, as in a loan or mortgage, ensuring that the loan is paid off over a specified period.

Compounded Monthly

A method where interest earnings are calculated and added to the principal amount each month, allowing the interest to then earn interest in subsequent months.