Suppose that the demand curve for good Z is downward sloping.If the price of good Z decreases because of a shift in supply,this will cause:
A)an increase in the demand for good Z.
B)a movement along the demand curve of good Z.
C)no effect on the quantity demanded of good Z.
D)fewer people to purchase good Z.

Question

Quizplus · Accepted Answer

If the price of good Z decreases due to a shift in supply, it will cause a movement along the demand curve of good Z. This means that the quantity demanded of good Z will increase as consumers are willing to buy more of the good at the lower price. However, there is no change in the demand itself, as that is determined by factors other than price, i.e., consumer preferences, income, and availability of substitutes. Therefore, option A is incorrect. Option C is incorrect because there is a change in the quantity demanded, and option D is incorrect because a decrease in price generally leads to more people purchasing the good.

Suppose That the Demand Curve for Good Z Is Downward