As a result of an increase in demand from D₂ to D₁ in Figure 36.4, ceteris paribus, the price of a $40,000 U.S. computer system, in terms of Japanese yen, would: =

Question

Quizplus · Accepted Answer

According to the law of demand, an increase in demand for a good leads to an increase in its price, ceteris paribus. Therefore, in this case, an increase in demand from D₂ to D₁ would lead to an increase in the price of a $40,000 U.S. computer system, in terms of Japanese yen. The increase in price would be determined by the extent of the increase in demand and the sensitivity of the price to changes in demand, so we cannot determine the exact amount of the increase from the given information. However, the only answer choice that reflects an increase in price is D, which is therefore the best choice.

As a Result of an Increase in Demand from D2

As a Result of an Increase in Demand from D₂