Question

If demand decreases, producers will decrease prices to do what?

A.) Cause an increase in supply.

B.) Get people to buy their goods.

C.) Stop people from buying their goods.

D.) Influence the IRS to impose tax relief measures.

Answer 1

Producers decrease prices to get people to buy their goods when demand decreases, as this makes their products more attractive and can increase the quantity demanded, aligning with the law of demand.

Step-by-step explanation:

When demand decreases, producers will often decrease prices in order to get people to buy their goods. This is because a decrease in demand means that consumers at the current price level are no longer willing or able to purchase the same quantity of goods as before. By lowering prices, producers are trying to make their products more attractive to potential buyers, thereby hoping to increase the quantity demanded of their goods and services.In economic terms, this can be seen as a move along the demand curve. If a producer decreases the price, the law of demand states that the quantity demanded will typically increase, assuming other factors remain constant. Therefore, the main answer to the student's question is B.) Get people to buy their goods.In conclusion, reducing the price when demand falls is a strategy to stimulate consumer interest and sales, aiming to rebalance the market equilibrium.