Chapter 17: Problem 29

A decrease in demand means that the quantity demanded - \((\mathrm{LO} 2)\) a) does not fall at any price b) falls only at the equilibrium price c) falls at a few prices d) falls at most prices e) falls at all prices

Short Answer

Expert verified

A decrease in demand means that the quantity demanded \((\mathrm{LO} 2)\) falls at all prices.

Step by step solution

Option a: Does not fall at any price

A decrease in demand would result in a lower quantity demanded at every price level. Thus, this option contradicts the effect of a decrease in demand, making it incorrect.

Option b: Falls only at the equilibrium price

A decrease in demand does not only impact the equilibrium price. It leads to a lower quantity demanded at every price level, not just the equilibrium price. So, this option is also incorrect.

Option c: Falls at a few prices

This option is vague and does not accurately describe the impact of a decrease in demand. A decrease in demand would lead to a lower quantity demanded at every price level, not just at a few prices. Therefore, this option is incorrect.

Option d: Falls at most prices

This option suggests that a decrease in demand would lead to a lower quantity demanded at most prices. Although this option seems more plausible, it still does not accurately capture the effect of a decrease in demand. A decrease in demand would affect quantity demanded at every price level, making this option incorrect.

Option e: Falls at all prices

This option correctly states that a decrease in demand would lead to a lower quantity demanded at all prices. When demand decreases, the entire demand curve shifts to the left, meaning that the quantity demanded is less at every price level. This option is consistent with the impact of a decrease in demand, making it the correct answer. So, the correct answer is: A decrease in demand means that the quantity demanded - \((\mathrm{LO} 2)\) e) falls at all prices