"As the price of personal computers continues to fall, demand increases." This headline is inaccurate because:
A)a change in the price of personal computers shifts the demand curve.
B)a change in the price of personal computers shifts the supply curve.
C)the statement is backwards: increased demand leads to lower prices.
D)a falling price for personal computers increases quantity demanded, not demand.

Question

Quizplus · Accepted Answer

A falling price for personal computers would lead to an increase in quantity demanded, not an increase in demand. The demand curve would remain the same, but a movement along the curve would occur as consumers purchase more at the lower price. Option A and B are incorrect as they suggest a change in the curve rather than a movement along it. Option C is incorrect as it implies causation in the wrong direction.

"As the Price of Personal Computers Continues to Fall, Demand