Question

If the price of a product were to go down, which of the following will most likely happen?a. The quantity demanded will increase.b. The quantity demanded and supplied will stay the same.c. The quantity demanded will decrease.d. The quantity supplied will decrease.

Answer 1

The correct answers are letter "A" and "D": The quantity demanded will increase; The quantity supplied will decrease.

Step-by-step explanation:

According to the supply theory, if the price decreases so will the quantity supplied. The relationship between price and quantity supplied is directly proportional. However, the demand theory states that when the price decreases, the quantity demanded will increase, meaning the relationship between price and quantity demanded is inversely proportional.