QuestionJune 1, 2025

A student writes the following: "Increased production leads to a lower price, which in turn increases demand." This student must be referring to A. an increase in demand. B. an increase in quantity demanded.

A student writes the following: "Increased production leads to a lower price, which in turn increases demand." This student must be referring to A. an increase in demand. B. an increase in quantity demanded.
A student writes the following:
"Increased production leads to a lower price, which in turn increases demand."
This student must be referring to
A. an increase in demand.
B. an increase in quantity demanded.

Solution
4.1(390 votes)

Answer

B. an increase in quantity demanded. Explanation 1. Define Economic Terms "Increase in demand" refers to a shift of the demand curve to the right, meaning consumers are willing to buy more at every price. "Increase in quantity demanded" refers to movement along the demand curve due to a change in price. 2. Analyze Scenario Increased production leads to lower prices, causing movement along the demand curve, not a shift.

Explanation

1. Define Economic Terms<br /> "Increase in demand" refers to a shift of the demand curve to the right, meaning consumers are willing to buy more at every price. "Increase in quantity demanded" refers to movement along the demand curve due to a change in price.<br /><br />2. Analyze Scenario<br /> Increased production leads to lower prices, causing movement along the demand curve, not a shift.
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