Chapter 3: Problem 22
Use the law of diminishing marginal utility to explain why demand curves slope downward.
Chapter 3: Problem 22
Use the law of diminishing marginal utility to explain why demand curves slope downward.
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Get started for free"The price of T-shirts keeps rising and rising, and people keep buying more and more. T-shirts must have an upwardsloping demand curve." Identify the error.
Some goods are bought largely because they have "snob appeal." For example, the residents of Beverly Hills gain prestige by buying expensive items. In fact, they won't buy some items unless they are expensive. The law of demand, which holds that people buy more at lower prices than higher prices, obviously doesn't hold for the residents of Beverly Hills. The following rules apply in Beverly Hills: high prices, buy; low prices, don't buy. Discuss.
A Dell computer is a substitute for an HP" computer. What happens to the demand for HP computers and the quantity demanded of Dell computers as the price of a Dell falls (as a result of a change in supply)?
Many movie theaters charge a lower admission price for the first show on weekday afternoons than they do for a weeknight or weekend show. Explain why.
What does a sale on shirts have to do with the law of demand (as applied to shirts)?
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