Simple Economics Questions - Will be a quickie

aditya · #1 10-02-2007, 06:15 PM

A decrease in demand for a product will cause the price of the product to fall and supply of the product to decrease.

True or False.

Thanks

Dunno if this is spamming or not but its an honest question lol.

smartalecc5 · #2 10-02-2007, 06:24 PM

Absolutely. The demand curve shifts left which sets both the equilibrium price and quantity lower.

maniacut · #3 10-02-2007, 06:26 PM

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Absolutely. The demand curve shifts left which sets both the equilibrium price and quantity lower.

[/ QUOTE ]

ItalianFX · #4 10-02-2007, 06:28 PM

I'm going to say True.

A decrease in demand will cause the demand curve to shift to the left causing prices to fall and quantity to fall. This also decreases the quantity supplied.

aditya · #5 10-02-2007, 06:30 PM

Alright, thanks a lot guys. That's what I put on the test, and she marked it wrong for some reason. Yay!

ItalianFX · #6 10-02-2007, 07:46 PM

Decrease in demand of a product doesn't decrease supply, it decreases the quantity supplied. She may be getting caught up in her own words.

qdmcg · #7 10-02-2007, 08:49 PM

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Decrease in demand of a product doesn't decrease supply, it decreases the quantity supplied. She may be getting caught up in her own words.

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aditya · #8 10-03-2007, 07:13 AM

[ QUOTE ]
Decrease in demand of a product doesn't decrease supply, it decreases the quantity supplied. She may be getting caught up in her own words.

[/ QUOTE ]

ugh, it prolly was a trick question or whatever, and I think now that the answer really is false. Didn't see supply until you pointed it out lol. Meh, I think I have a real slim change of getting it right now.

Thanks BTW

qdmcg · #9 10-03-2007, 08:28 AM

just fyi, a decrease in demand will never effect the supply curve. it will effect the equilibrium price and quantity sold/offered.

this should make sense because a change in the direction of one line will never effect the other line (supply curve is independent of demand curve).

ItalianFX · #10 10-03-2007, 08:48 AM

[ QUOTE ]
[ QUOTE ]
Decrease in demand of a product doesn't decrease supply, it decreases the quantity supplied. She may be getting caught up in her own words.

[/ QUOTE ]

ugh, it prolly was a trick question or whatever, and I think now that the answer really is false. Didn't see supply until you pointed it out lol. Meh, I think I have a real slim change of getting it right now.

Thanks BTW

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I think you still have a chance to get it right. It depends on what your teacher meant by "supply." Supply and Quantity Supplied are different things, and it wasn't clear in her question on what she was looking for.

Why do you think it is false?