At a price of $5, Sam buys 10 units of a product; when the price increases to $6, Sam buys 8 units. Martha says Sam's demand has decreased. Is Martha correct?

Question

Quizplus · Accepted Answer

Martha is incorrect in saying that Sam's demand has decreased. Demand refers to the entire relationship between the price and the quantity demanded, whereas quantity demanded refers to the specific amount of a product that is purchased at a given price. In this case, Sam's quantity demanded has decreased from 10 to 8 units as the price increased from $5 to $6, but his demand has not changed. In other words, Sam is still willing and able to buy the product at a higher price, but he will buy fewer units than before. Therefore, option C is the correct answer.

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