Posted by Trying on Saturday, July 4, 2009 at 5:45pm.
1.Which of the following is consistent with the law of supply?
a.As the price of calculators rises, the supply of calculators increases, ceteris paribus.
b.As the price of calculators falls, the supply of calculators increases, ceteris paribus.
c.As the price of calculators rises, the quantity supplied of calculators increases, ceteris paribus.
d.As the price of calculators rises, the quantity supplied of calculators decreases, ceteris paribus.
2. DVDs and DVD Players are complements. An increase in the price of DVD Players would cause which of the following in the market for DVDs?
a.The equilibrium price and quantity of DVDs would increase.
b.The equilibrium price and quantity of DVDs would decrease.
c.The equilibrium price of DVDs would increase and the equilibrium quantity would decrease.
d.The equilibrium price of DVDs would decrease and the equilibrium quantity would increase.
- Economics - SraJMcGin, Saturday, July 4, 2009 at 6:58pm
Look close as the definition from the Business Dictionary:
law of supply and demand
Common sense principle which defines the generally observed relationship between demand, supply, and prices: as demand increases the price goes up which attracts new suppliers who increase the supply bringing the price back to normal. However, in the marketing, of high price (prestige) goods, such as perfumes, jewelry, watches, cars, liquor, a low price may be associated with low quality, and may reduce demand.
- Economics - SraJMcGin, Saturday, July 4, 2009 at 7:03pm
For the second part of your post, Wikipedia has a good explanation:
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