Question

9. If the supply of a product increases, then

Answer 1

the price decreases.
the price increases.
the demand increases.
the demand decreases.

Answer 2

@sylbot

Answer 3

i chose the first one

Answer 4

the price decreases, you are correct

Answer 5

The supply increase causes both, the demand and the rice decrease.

Answer 6

.....no thats not true

Answer 7

yes, that is!

Answer 8

the demand doesn't necessarily decrease

Answer 9

the demand remains untouched.

Answer 10

the supply increase, the demand is the same, the price decreases.

Answer 11

capitalism!

Answer 12

I don't want to run into an argument... but most likely (not always) the demand decreases mostly as well.

Answer 13

not true.

Answer 14

that is an assumption.

Answer 15

im getting really confused here

Answer 16

I'm leaning towards A too

Answer 17

you cannot assume a shift in demand based on information directly detailing a shift in supply.

Answer 18

Actually the price decrease causes demand increase, because people would start buying a little more, since the more of the item is available at the price.

Answer 19

....I am unsure where you are learning this....what model are you using.

Answer 20

This is a simple multiple choice problem not a complex analysis of a market, lol

Answer 21

using neoclassical supply and demand curve the answer is A 100% sure

Answer 22

We can't help with tests

Answer 23

I know its not the actual test

Answer 24

oh...oops, I'm new to the site lol sorry.

Answer 25

just the review

Answer 26

I don't mind, just don't outright say it's a test and nobody cares

Answer 27

ok sorry. didnt mean it like that

Answer 28

it really is just a review

Answer 29

OH I know what you are talking about, you are including the market forces that would force it back to equilibrium...but we aren't gonna include those, because I think this is a short term analysis.

Answer 30

I am not learning this... I have learned some topics in math related to real life, and touched this theme by the way.

Also, if the supply of the product increases the price won't necessary. My example to support would be a increase in the supply of deodorants.. they always will cost just about the same...

This is more like an opinion though....

Answer 31

no you are right if you are analyzing long term, but short term analysis is what is probably in question here, because heybellers is most likely modeling this using a simple supply demand curve, so an outward shift in supply will increase price and set new equilibrium price.

Answer 32

Can you guys help me with another?

Answer 33

Congrats on your new color - yellow!

Well, that's what the question does sound like, short terms... but this is just a logic question which anyone who is not taking, and certainly someone that's taking, economics; should be able to figure out the answer.