Economic rule stating that the quantity demanded and price move in opposite directions
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Why do price and quantity demanded move in opposite directions?Answer and Explanation: The price and the total revenue move in the opposite direction when the demand is elastic because, with elastic demand, the decrease in the quantity demanded is greater than the increase in the price. Thus, when the demand is elastic, an increase in price decreases the total revenue.
What is the economic rule?SEVEN ECONOMIC RULES: A set of seven fundamental notions that reflect the study of economics and how the economy operates. They are: (1) scarcity, (2) subjectivity, (3) inequality, (4) competition, (5) imperfection, (6) ignorance, and (7) complexity.
Is an economic rule stating that the additional satisfaction a consumer gets from purchasing one more unit of a product declines with each additional unit purchased?The law of diminishing marginal utility states that all else equal, as consumption increases, the marginal utility derived from each additional unit declines.
In what direction do price and quantity demanded move?The demand curve will move downward from the left to the right, which expresses the law of demand—as the price of a given commodity increases, the quantity demanded decreases, all else being equal. Note that this formulation implies that price is the independent variable, and quantity the dependent variable.
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