Question

You notice that your grocery store always has day-old bakery products at a reduced price. Why might that be?

a. At the original price, the quantity demanded was greater than the quantity supplied.

b. At the original price, there was a shortage of bakery products.

c. The original price was an equilibrium price because it was established in a free market.

d. At the original price, quantity supplied was greater than quantity demanded.

D2 D1

Refer to the figure above. Moving from demand curve D2 to demand curve D1 could be caused by a(n):

Select one:

a. increase in consumers' incomes.

b. increase in quantity supplied.

c. increase in the price of a substitute.

d. increase in the price of a complement.

Answer 1

1) When there is reduced price people will demand more than the quantity that is supplied. So when there is a reduced price

Answer: At original price quantity demanded was greater than quantity supplied.

2) When there is a fall in demand curve the demand curve shift towards left. Here there is a movement in demand curve from D2 to D1 which shows a fall in demand.

The demand always falls for a good if there is an increase in supply of good, decrease in price of substitute goods, decrease in consumer income etc.

Answer: Increase in quantity supplied.