A Demand Curve Indicates That

question 40

Multiple Choice

A demand curve indicates that:

• A) the quantity demanded of a good is higher when its price is higher.
• B) the quantity demanded of a good is higher when its price is lower.
• C) the demand for a good is higher when its price is lower.
• D) the demand for a good is higher when its price is higher.

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Definitions:

Deadweight Loss

A reduction in economic effectiveness that happens when a good or service fails to reach or cannot reach its equilibrium.

Demand

The quantity of a good or service that consumers are willing and able to purchase at a given price.

Elastic

A characteristic of supply or demand that indicates a high sensitivity to changes in price.

Inelastic

Describes a situation where a change in price leads to a relatively small change in the quantity demanded or supplied.