Which of the following statements about price, demand, and profit is generally true?
A)As price increases, demand decreases.
B)As demand increases, profit decreases.
C)As price increases, demand increases.
D)As price decreases, demand decreases.

Question

Quizplus · Accepted Answer

The law of demand states that as the price of a good or service increases, the quantity demanded of that good or service will decrease, all else being equal. This means that as price increases (option A), demand will generally decrease. As for the relationship between demand and profit, it can vary depending on the specific circumstances of the market. Generally, an increase in demand (option C) can lead to an increase in profit, but this depends on the cost of production and other factors affecting the market. Option B is generally untrue, as an increase in demand can lead to an increase in profit if the increase in revenue from higher demand outweighs any increase in costs of production. Option D is also generally untrue, as a decrease in price can lead to an increase in demand.

Which of the Following Statements About Price, Demand, and Profit