Explain why a decrease in an input price causes less of an increase in the quantity demanded of the factor if we assumed that product price remained constant
What will be an ideal response?
The input price decrease will lead to additional output that will lower the output price. As the market price declines each firm reduces its output. The total demand for the input will not be as great as when the output market price remains constant.
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Which of the following will increase the demand for motorcycles?
a. A fall in the price of motorcycles. b. A fall in insurance rates for motorcycles. c. A fall in the price of automobiles. d. A fall in buyers' incomes (assuming motorcycles are a normal good). e. A fall in consumer preference for motorcycles.
Suppose that many people who earn a living designing apps decide they can make more money selling honey and switch occupations. How will this change affect the number of apps supplied by producers?
A. supply decreases B. supply does not change C. supply increases