Question

1) The law of demand implies, holding everything else constant, that as the price of yogurt A) increases, the demand for yogurt will increase. B) increases, the quantity of yogurt demanded will decrease. C) decreases, the quantity of yogurt demanded will decrease. D) decreases, the demand for yogurt will increase.

Answer 1

The law of demand implies, holding everything else constant, that as the price of yogurt is described below

Explanation:

The terms supply and demand refer to the behavior of people as they interact with  one another in markets. A market is a group of buyers and sellers of a particular  good or service. The buyers as a group determine the demand for the product, and  the sellers as a group determine the supply of the product.

• Suppose that the price of frozen yogurt falls. The law of demand says that you will buy more frozen yogurt. At the same time, you will probably buy less ice cream. Because ice cream and frozen yogurt are both  cold, sweet, creamy desserts, they satisfy similar desires.
• When a fall in the price  of one good reduces the demand for another good, the two goods are called  substitutes. Substitutes are often pairs of goods that are used in place of each  other, such as hot dogs and hamburgers, sweaters and sweatshirts, and movie tickets and video rentals.
• Now suppose that the price of hot fudge falls. According to the law of demand, you will buy more hot fudge. Yet, in this case, you will buy more ice cream  as well, because ice cream and hot fudge are often used together. When a fall in the  price of one good raises the demand for another good, the two goods are called  complements. Complements are often pairs of goods that are used together,  such as gasoline and automobiles, computers and software, and skis and ski lift  tickets.