Question

10. Assume that at the current market price of $4 per unit of a good, you are willing and able to buy 20 units. Last year at a price of $4 per unit, you would have purchased 30 units. What has most likely happened over the last year?
[A] Supply has decreased.
[B] Quantity supplied has decreased.
[C] Demand has decreased.
[D] Supply has increased.
[E] Demand has increased.

Answer 1

Answer:

The correct answer is option C.

Explanation:

At the current market price of $4, the quantity demanded is 20 units.  

Last year at the same price the quantity demanded was 30 units.  

This means that the price remains constant, the quantity has declined from last year. This indicates that the demand has declined over the year shifting the demand curve to the left.