Final answer:
If a discretionary product's price increases with supply remaining constant, demand usually decreases. Changes in demand and supply, influenced by factors like technology and product quality, affect equilibrium price and quantity in markets.
Step-by-step explanation:
According to supply and demand theory, if a discretionary product's price increases and the supply c) stays the same, the demand for the product will usually decrease. This is because discretionary products are not essential, and consumers may be more sensitive to price changes, opting to reduce consumption or switch to alternatives when prices go up.
Equilibrium Price and Quantity Responses
- Increase in demand: Equilibrium price and quantity rise if supply cannot increase proportionally.
- Decrease in demand: Equilibrium price and quantity fall.
- Increase in supply: Equilibrium price falls and quantity rises, especially when a technological improvement reduces production costs.
- Decrease in supply: Equilibrium price rises and quantity falls.
Changes in technology, product quality, or consumer needs are key factors that can cause shifts in supply and demand, affecting equilibrium price and quantity in both product and labor markets.