If the Price of a Resource Falls, Other Things Constant

question 69

Multiple Choice

If the price of a resource falls, other things constant,

• A)demand for the product it produces will increase
• B)demand for a substitute product will increase
• C)demand for a substitute resource will fall
• D)supply of that resource will rise
• E)supply of a substitute resource will also rise

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Definitions:

Excess Supply

A situation where the quantity of a good or service supplied surpasses the quantity demanded at a specific price.

Excess Demand

Excess demand occurs when the quantity demanded of a product or service at a given price exceeds the quantity supplied, often leading to a shortage.

Income

The money received, especially on a regular basis, for work or through investments.

Wages

Wages are the compensation paid to employees for their labor, often calculated on an hourly, daily, or piecewise basis.