Question

One reason that the quantity demanded of a good increases when its price falls is that the:

a. lower price shifts the demand curve to the right
b. lower price increases the real incomes of buyers, enabling them to buy more
c. price decline shifts the supply curve to the left
d. lower price shifts the demand curve to the left

Answer 1

b. lower price increases the real incomes of buyers, enabling them to buy more.

Step-by-step explanation:

The law of demand states that;

-the higher the price, the lower the quantity demanded.

- the lower the price, the higher the quantity demanded.

This law is true considering the fact that consumers tends to buy more when the price is low and vice versa.

One of the most important factor in determining the quantity demanded of a product is the price of the product itself. It means consumers tends to demand for more when the price is low.

When price of a product reduces, the real income of buyers will have effect thus enable them to buy more.