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scZoUnD [109]
3 years ago
6

Using the supply and demand curve above, which statement is TRUE? A) By decreasing the price from $3.50 (P1) to $2.60 (P2), supp

ly decreases. B) By decreasing the price from $3.50 (P1) to $2.60 (P2), demand decreases. C) By decreasing the price from $3.50 (P1) to $2.60 (P2), the quantity of supply decreases. D) By decreasing the price from $3.50 (P1) to $2.60 (P2), the quantity of demand decreases.
Social Studies
1 answer:
andre [41]3 years ago
4 0

Answer:

The correct answer is C:  by decreasing the price from $3.50 (P1) to $2.60 (P2), the quantity of supply decreases.

Explanation:

The supply and demand curve demonstrates <u>that there is an inverse relationship between price and demand</u>. It means that if the price increases, demand will decrease. Also, it shows that <u>supply is directly related to price.</u> Therefore, <u>suppliers may provide more products or services if their price increases</u>. Accordingly, by decreasing the price of the merchandise, the quantity of supply decreases. It is important to keep into account that these <u>both economic forces</u> fix a balance of the prices of things in the market. Option A is quite similar but does not include the technical term “quantity”, which validates option C as the correct one.

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