State the law of demand and illustrate it. Explain what is meant by the term "price" in the law of demand
What will be an ideal response?
The law of demand states that when the price of a good increases, people buy less of the good, other things equal, and when price of a good decreases, people buy more of it. An increase in the price of gasoline would lead people to buy less gasoline. Price means "relative price," or the price of the good in terms of other goods. People make their decisions on the basis of relative prices and not on the basis of the money price.
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Which of the following measures does not help promote technological progress?
(A) Reducing the scale of the market for a new product. (B) Training programs for workers. (C) Increased wages for researchers. (D) Issuing a patent to a company that invents a new product.
What is any factor that makes it difficult for a new firm to enter a market referred to as?
(A) A sustainable cost. (B) A commodity. (C) Perfect competition. (D) A barrier to entry.