A theory asserts that manufacturers are less willing to sell units of output as the price of goods decreases. However, as the price of computers fell throughout the 1990s, more computers were sold. Which of the following explanations of the apparent conflict between theory and data is most accurate?
A) It is likely that variables other than the price and quantity of computers sold were changing.
B) The theory must be invalid.
C) The theory rests on assumptions that are too simplistic.
D) All variables other than the price and quantity of computers sold were unchanged.

Question

Quizplus · Accepted Answer

Other variables such as advancements in technology, changes in consumer preferences, and changes in marketing strategies could have affected the quantity of computers sold, despite the decrease in price. Therefore, the apparent conflict between theory and data can be explained by the presence of other variables that affected the market for computers.

A Theory Asserts That Manufacturers Are Less Willing to Sell