6. Use the graph below to answer this question: Assume that the current price is $70. The sellerwants to increase its revenues and has decided to increase the price to $80. Is this a good idea?$10070302010 FDemend10 20 30 40 60 00 70 BO 90 100Qyemtity of e product (In thousanda)Price

At the current price of $70, the quantity demanded is 40 thousand. At the price of $80, the quantity…

Answered: 6. Use the graph below to answer this…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter6: Consumer Choices

Section: Chapter Questions

Problem 3SCQ: Explain all the reasons why a decrease in a products price would lead to an increase in purchases.

See similar textbooks

Similar questions

Explain all the reasons why a decrease in a products price would lead to an increase in purchases.
What does a downward-sloping demand curve mean about how buyers in a market will react to a higher price?
Suppose the cross-price elasticity of apples with respect to the price of oranges is 0.4, and the price of oranges falls by 3. What will happen to the demand for apples?
Would you expect supply to play a more significant role in determining the price of a basic necessity like food or a luxury like perfume? Explain. Hint: Think about how the price elasticity of demand will differ between necessities and luxuries.
Explain why the following statement is false: In the goods market, no seller would be willing to sell for less than the equilibrium price.
Consider the demand for hamburgers. If the price of a substitute good (for example, hot dogs) increases and the price of a complement good (for example, hamburger buns) increases, can you tell for sure what will happen to the demand for hamburger? Why or why not? Illustrate your answer with a graph.
Review Figure 3.4 again. Suppose the price of gasoline is 1.00. Will the quantity demanded he lower or higher than at the equilibrium price of 1.40 per gallon? Will the quantity supplied be lower or higher? Is them a shortage or a surplus in the market? If so, of how much? Figure 3.4 Demand and Supply of Gasoline
Suppose there is a soda tax to curb obesity. What should a reduction in the soda tax do to the supply of sodas and to the equilibrium price and quantity? Canyon show this graphically? Hint: Assume that the soda tax is collected from the sellers.
What is the difference between the demand and the quantity demanded of a product, say milk? Explain in words and show the difference on a graph with a demand curve for milk.

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6. Use the graph below to answer this question: Assume that the current price is $70. The seller wants to increase its revenues and has decided to increase the price to $80. Is this a good idea? $100 70 30 20 10 F Demend 10 20 30 40 60 00 70 BO 90 100 Qyemtity of e product (In thousanda) Price