0
It really depends. If this is a basic math question, one would assume that if the price is lower, people will buy more, ie sales will increase.
However, in real life, that is true only to a point. For example, if I offered to sell you a soda for a nickel, you probably wouldn't buy it. Most likely you'd assume that it was poor quality or that I was trying to trick you. So, lowering price doesn't necessarily mean increased sales.
What else can I help you with?
What is the output effect and the price effect for an oligopoly?
Since P>MC for an oligopoly, the output effect is that selling one more unit at the sales price will increase profit.The price effect is that an increase in production will increase the total amount sold, which will decrease the price and decrease the profit on all other units sold.If the output effect is greater than the price effect, the owner will increase production.If the price effect is greater than the output effect, the owner will not increase production (and may even decrease production).Oligopolists will continue to increase or decrease production until these marginal effects balance.
A decrease in demand will have what effect on equilibrium price and quantity?
There will be a decrease in price and quantity.
If a good is normal, then will a decrease in price cause a substitution effect that is significant?
Yes, if a good is normal, a decrease in price will likely cause a significant substitution effect, leading consumers to switch to the cheaper good.
What effect do price changes have when demand is elastic?
When demand is elastic, price changes significantly affect the quantity demanded. A decrease in price leads to a proportionally larger increase in quantity demanded, while an increase in price results in a proportionally larger decrease in quantity demanded. This sensitivity means that businesses must be cautious with price adjustments, as they can greatly impact total revenue. In such cases, lower prices can potentially increase overall sales and revenue, while higher prices may reduce sales and revenue.
What terms is defined as increase or decrease in purchasing power brought on by changing in price?
income effect
What is the output effect and the price effect for an oligopoly?
Since P>MC for an oligopoly, the output effect is that selling one more unit at the sales price will increase profit.The price effect is that an increase in production will increase the total amount sold, which will decrease the price and decrease the profit on all other units sold.If the output effect is greater than the price effect, the owner will increase production.If the price effect is greater than the output effect, the owner will not increase production (and may even decrease production).Oligopolists will continue to increase or decrease production until these marginal effects balance.
A decrease in demand will have what effect on equilibrium price and quantity?
There will be a decrease in price and quantity.
If a good is normal, then will a decrease in price cause a substitution effect that is significant?
Yes, if a good is normal, a decrease in price will likely cause a significant substitution effect, leading consumers to switch to the cheaper good.
What is likely effect of competition among Internet service providers on the price of services?
The price of services will decrease.
What effect do price changes have when demand is elastic?
When demand is elastic, price changes significantly affect the quantity demanded. A decrease in price leads to a proportionally larger increase in quantity demanded, while an increase in price results in a proportionally larger decrease in quantity demanded. This sensitivity means that businesses must be cautious with price adjustments, as they can greatly impact total revenue. In such cases, lower prices can potentially increase overall sales and revenue, while higher prices may reduce sales and revenue.
When will the ps3 price come down?
The PS3 system prices will decrease dramatically once the sales of the PS4 increase some more. It has already caused the PS3 price to decrease a little bit.
Does a reduction in share price decrease company profit?
No, a reduction in a company's share price has no effect on the company's profits.
What terms is defined as increase or decrease in purchasing power brought on by changing in price?
income effect
Is it true that substitution effect is always negative?
No, the substitution effect is not always negative. It refers to the change in quantity demanded of a good when its price changes, leading consumers to substitute it with other goods. While a price increase typically results in a decrease in quantity demanded (a negative substitution effect), a price decrease can lead to an increase in quantity demanded, which can be viewed as a positive effect. Thus, the direction of the substitution effect depends on the nature of the price change.
Most accurately explains the effect of competition among local gas stations on the price of gasoline?
The price of gasoline will decrease
What most accurately explains the effect of competition among local gas stations on the price of gasoline?
The price of gasoline will decrease
Explain the subsititution and income effect of decrease in price?
substitution effect is the explanation for the downward slope of the aggregate damnd curve.
