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.
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.
There will be a decrease in price and quantity.
income effect
Imagine the curves. A decrease in demand would lower the equilibrium price by moving the demand curve to the left, dragging the intersection point down.
The demand for gasoline will decrease. The price of gasoline will decrease. The supply of gasoline will increase. The price of gasoline will increase.
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.
There will be a decrease in price and quantity.
The price of services will decrease.
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.
No, a reduction in a company's share price has no effect on the company's profits.
income effect
The price of gasoline will decrease
The price of gasoline will decrease
substitution effect is the explanation for the downward slope of the aggregate damnd curve.
An example of a primary effect is when an increase in the price of gasoline leads to a decrease in the quantity demanded by consumers.
Imagine the curves. A decrease in demand would lower the equilibrium price by moving the demand curve to the left, dragging the intersection point down.
The demand for gasoline will decrease. The price of gasoline will decrease. The supply of gasoline will increase. The price of gasoline will increase.