Suppose the price of cheese increases. This will result in:

Question

Quizplus · Accepted Answer

When the price of a good increases, the quantity demanded decreases, assuming all other factors remain constant. This is because consumers will seek out substitutes or reduce their consumption when the price of a good is too high. Therefore, there would be a decrease in the quantity demanded of cheese but not a decrease in demand, which is a shift in the entire demand curve due to other factors such as changes in income or taste. The increase in the price of cheese may also lead to an increase in the quantity supplied as producers are incentivized to supply more of the good at a higher price.

Suppose the Price of Cheese Increases