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Supply and Demand Are Two Important Factors That Influence the Market

Question 65

Multiple Choice

Supply and demand are two important factors that influence the market. Supply means the amount of a specific product or service available. Demand refers to the amount of that product or service consumers want to purchase. Both of these factors influence the price of goods. For example, if there is a large supply of a product which few people want to buy, the price of that product will go down. As the price goes down, demand usually increases. Eventually, a balance between the two factors is reached and the optimal price for that product or service is determined. At that point, the supply and demand have reached equilibrium.
Why does demand only "usually" go up when the price is lowered?


A) Demand always increases on its own
B) The supply is often decreased instead
C) Price may not be the only factor causing low demand
D) People want to pay more for products, not less
E) The system is only based on speculation so nothing is certain

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