Homework Answers
Answer - c. The total value of purchases before and after the price change is the same
The above statement is NOT true when the price falls.
According to the law of demand, when the price of a good or service falls, quantity demanded rises provided other things remain constant. When the price falls, the total value of purchases also changes. However, the total value of purchases will increase of decrease depends upon the elasticity of demand. But when the price falls, quantity demanded also changes and thereby the total value of purchases of total revenue also changes. It cannot be remain same before and after the change in price.
The other options given is correct when the price falls. They are
a. Correct. When the price falls, those consumers who are previously cannot afford or not willing to purchase now can purchase.
b. Correct. When price calls, the consumer surplus always increase.
d. Correct. Those consumers who are already using the good, now they can purchase more due to fall in the price.
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QUESTION 4 Which of the following is not true when the price of a good or...
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Submit when finished answering the R button. Due to this being a web course, only scores will be shown, there will be back Question 1 1 pts Willingness to pay measures the value that a buyer places on a good. O is the amount a seller actually receives for a good minus the minimum amount the seller is willing to accept. is the maximum amount a buyer is willing to pay minus the minimum...
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Which of the following best defines producer surplus? O The difference between the price that suppliers actually O A situation in which all of the potential gains from trade have been realized. O The difference between the price that suppliers actually receive and the minimum price they would be willing to accept. receive and the maximum price they would be willing to accept. O The difference between the maximum price consumers are willing to pay and the price they actually...
2. The amount of a good that buyers are willing and able to buy at a specific price is known as: demand. sales. quantity demanded. product quantity. 3. The effect describes the change in consumer purchasing power that occurs when the price of a good changes. demand supply income substitution 4. The price of chicken has doubled. As a result, Andre will purchase pork instead of chicken. This is an example of the effect. substitution demand increasing cost income eos...
2) Consider a location model of differentiated products where the set of possible products is the line segment [0,11 and consumers are uniformly distributed along the line segment. Transportation costs in this model are equal to td, where d= |x- is the distance between the consumer's ideal variety and the variety she purchases. If a consumer with ideal variety x* purchases variety x at price p, then her utility is If the consumer does not purchase the good her utility...
32. Which of the following quantities decrease in response to a tax on a good? a. the size of the market for the good, the effective price of the good paid by buyers, and consumer surplus b. the size of the market for the good, producer surplus, and the well-being of buyers of the good (consumer surplus) c. the effective price received by sellers of the good, the wedge between the effective price paid by buyers and the effective price...
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Which of the following properties hold true for the equilibrium price-quantity combination? Buyers who are willing to pay higher than the equilibrium price do not find sellers. At the equilibrium price producer surplus equals consumer surplus. The equilibrium output is produced at the lowest avoidable cost The equilibrium output is produced at the lowest opportunity cost. • Previous No new data to save. Last chec
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