Question

When the price of a Tesla car increased, Abby decided to buy a different car model. Which Economic principle does this demonstrate?

Answer 1

Answer:

Law of Demand is the Economic principle that is demonstrated here.

Explanation:

As we know that ,

The Law of Demand is a fundamental principle of Economics which states that at a higher price consumers will demand a lower quantity of a good.

Here,

If the company Tesla is increasing its price then the consumer Abby will search for lower quantity i.e Abby will decide to buy a different car model.

So, The Economic principle that demonstrated here is Law of Demand .