Question

When the price of ice cream cones rises from $1 to $2 in the graph below, what happens to the quantity of cones eaten per week? $4 $%3 (4,2) $2 $1 $0 uantity of cones eaten per veek O increases from 0 to 7 increases from 4 to 7 decreases from 7 to 4 remains the same

Answer 1

1. Decreases from 7 to 4

Law of demand states that other factors being constant, there is an inverse relationship between price and quantity demanded.

Given: Price rises from $1 to $2

If price increases, quantity demanded will decrease. So Quantity decreases from 7 units to 4 units.

2. 2000 more TVs and 5000 fewer DVD players

Given: Operating mode changes from B to D.

B – 1000 Tvs and 9000 DVD players.

D – 3000 Tvs and 4000 DVD players.

B to D: (1000-3000) TVs and (9000-4000) DVD

B to D: 2000 more TVs and 5000 less DVD