A decrease in price of a certain good most likely will lead to
A)an increase in quantity demanded and an increase in the demand for that good.
B)an increase in quantity demanded but no change in the demand for that good.
C)an increase in demand but no change in quantity demanded.
D)no change in demand and no change in quantity demanded.

Question

Quizplus · Accepted Answer

A decrease in price typically results in an increase in the quantity demanded due to the law of demand, which states that, ceteris paribus, as the price of a good decreases, the quantity demanded increases. However, this does not change the demand curve itself, which represents the relationship between price and quantity demanded at every possible price level. The demand curve shifts only if there is a change in a non-price determinant of demand, such as consumer income or preferences.

A Decrease in Price of a Certain Good Most Likely