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3 years ago

If the price of pants increases, what would you expect would happen in the market for pants?

2 answers:

7 0

<u>If the price of the pants increases, it will lead to a fall in demand for the pants while the supplier will supply more at the given price. This will push the price in the downward direction, and the market will reach the equilibrium. </u>

Further Explanation:

Law of Demand:

According to this law 'when the price of the goods increases, quantity demanded will fall and when the price of the goods decreases, the quantity of good demanded will increase while other things remain constant. So, the price of the pants increase, the quantity demanded will decrease.

Law of Supply:

According to the Law of supply, when the price of the goods increases, the quantity supplied of the goods will increase and when the price of the goods decreases, the quantity supplied of goods will decrease. The supply curve is upward sloping since the quantity supplied and prices are directly proportional.

The increase in supply will put pressure on the price bring them down, and the market will reach the equilibrium. The demand will equal the supply at this point of price.

<u>Therefore, the price that will prevail in the market will be equal to the price where the demand and supply are equal. And the market will be in equilibrium. </u>

Learn more:

1. Demand and type of goods

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2. Demand and supply of goods

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3. Elasticity of demand

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Answer details:

Grade: Middle School

Subject: Economics

Chapter: Market

Keywords: price, price of pants increase, market, Law of demand, Law of supply, economics, demand, supply, goods.

worty [1.4K]3 years ago

6 0

Answer: There will be a surplus at the increased price.

Explanation: Acc. to the law of demand as the price of a good rises the quantity demanded for the good will fall. This is represented by a movement up along the demand curve.

Acc. to the law of supply as price of a good rises the sellers will supply more units of the good. This is represented by a movement up along the supply curve.

At the increased price, there will be a surplus in the market given by Q's - Q'd.

Eventually, the surplus will lead to a fall in the price of pants till demand for the good is equal to its supply.

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The correct answer is Passive or Interactive.

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2 years ago

What do the income effect, the substitution effect, and diminishing marginal utility have in common?

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Answer:

They all help explain the downsloping demand curve

Explanation:

The options to the question wasn't provided. The complete question can be in the attached image.

The demand curve slopes downward from left to right. This indicates that the higher the price, the lower the quantity demanded and the lower the price, the higher the quantity demanded.

Income effect is a change in quantity demanded when real income change. Quantity demanded increases when real income increases and decreases when real income falls.

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Diminishing marginal utility states that as consumption increases, utility derived from consumption falls and quantity demanded falls.

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3 years ago

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2 years ago

How does the velocity of money affect a national economy?.

qaws [65]

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2 years ago

true or false and then EXPLAIN why. Assume the economy produces five goods. If the prices of three of the goods increase, then t

Ipatiy [6.2K]

Answer:

The correct answer is False.

Explanation:

The prices of goods and services are fundamentally determined by their demand and supply. When they increase or decrease, it is because one of these two variables has led to a change. Specifically, an increase in prices occurs especially for three reasons.

Case 1: Supply is maintained and demand increases :

In this situation, companies continue to offer the same amount of a good or service, but we all buy more of them. This can happen for many reasons, among them, an increase in the population (there are more people and more traffic jams and more bikes are sold for circulation on the urban road), it becomes somewhat fashionable, our incomes increase, etc.

It can also happen that the price of a substitute rises (goods that give us exactly the same, such as orange soft drinks of one brand or another). If the price of brand X increases, the demand for brand Y will surely increase, since it will cover the same need at a lower price.

Case 2: Supply falls and demand remains :

A reduction in the supply of companies will make it more expensive. It can happen for a wide range of reasons: from the number of companies with these offers decreasing until the technology of some firms becomes outdated and only a few remain on the market. It may also happen that the price of inputs increases and that manufacturers cannot produce the same quantity as before due to this increase in price.

Case 3: Supply falls and demand increases :

In this case, a ‘mix’ of the phenomena that we have seen previously would take place. However, there are other more specific variables that cause prices to vary. For example, on occasion, governments artificially increase their monetary base. In other words, they use the strategy of manufacturing and issuing money, with more money in circulation than an economy really needs.

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