According to the law of demand, if a firm reduces the price of its good:
A) consumers in the market will demand more units of the good.
B) some consumers will exit the market.
C) consumers will demand fewer units than before the price cut.
D) the quantity of goods produced and sold by the firm will decline.
E) competing firms will reduce prices.

Question

Quizplus · Accepted Answer

According to the law of demand, there is an inverse relationship between price and quantity demanded. Therefore, if a firm reduces the price of its good, consumers in the market will demand more units of the good. This is because the lower price makes the good relatively more affordable or attractive compared to other goods, leading to an increase in the quantity demanded.

According to the Law of Demand, If a Firm Reduces