The price of computers drops by 20%. What is the most likely impact on supply and demand?
A) demand down, supply down
B) demand up, supply up
C) demand down, supply up
D) demand up, supply down

Question

Quizplus · Accepted Answer

Dropping the price of computers by 20% is likely to increase the demand for computers, as they are now more affordable for consumers. This increase in demand will likely lead to a decrease in the supply of computers, as manufacturers may not be able to keep up with the increased demand immediately. Therefore, the most likely impact on supply and demand is an increase in demand and a decrease in supply.

The Price of Computers Drops by 20