At a price of $2,000 per unit,the demand for Ranger 60 mountain bikes from Cloyd's Inc.is 300 units,which is same as the number of bikes manufactured every year.If the marketing managers at Cloyd's Inc.decide to sell each bike at a price lower than $2,000 per unit,_____.
A)a shortage of bikes will be created
B)the number of bikes being made will increase drastically
C)an inelastic demand for the bikes will be created
D)the demand and supply for the bike will attain equilibrium

Question

At a price of $2,000 per unit,the demand for Ranger 60 mountain bikes from Cloyd's Inc.is 300 units,which is same as the number of bikes manufactured every year.If the marketing managers at Cloyd's Inc.decide to sell each bike at a price lower than $2,000 per unit,_____.
A)​a shortage of bikes will be created
B)the number of bikes being made will increase drastically
C)an inelastic demand for the bikes will be created
D)​the demand and supply for the bike will attain equilibrium

Quizplus · Accepted Answer

If Cloyd's Inc. sells each bike at a price lower than $2,000 per unit, the demand for Ranger 60 mountain bikes will increase. This is because the demand is inversely related to the price. As the price decreases, the demand for the bikes will increase, and there will be more buyers than the number of bikes manufactured every year. This will create a shortage of bikes, as the demand will exceed the supply.

At a Price of $2,000 Per Unit,the Demand for Ranger