A decrease in the price level a. increases the quantity of goods and services supplied in the short run. b. decreases the quantity of goods and services demanded. c. increases the quantity of goods and services demanded. d. decreases the quantity of goods and services supplied in the long run.

Question

Business

Keira Pugh

27 October, 06:10

A decrease in the price level a. increases the quantity of goods and services supplied in the short run. b. decreases the quantity of goods and services demanded. c. increases the quantity of goods and services demanded. d. decreases the quantity of goods and services supplied in the long run.

+3

Answers (1)

Know the Answer?

Malachi Berger · Answer 1

c. increases the quantity of goods and services demanded.

Explanation:

According to the law of demand, there is an indirect relationship between demand and the prices for good or service. Should the price of a good or service increase, its demand will decrease. Demand comprises of the willingness and ability to buy.

A decrease in the price level will make the product affordable by more buyers. The market will afford to buy more of that product. The law of demand works together with the law of supply. The intersection of demand and supply curves determines the price of a product.