Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
A rise in the price of coffee leads to a decrease in the quantity of coffee demanded.
B
A decrease in the price of coffee leads to a decrease in the quantity of coffee supplied.
C
An increase in consumer income leads to the demand for coffee increasing.
D
A rise in the price of coffee leads to an increase in the quantity of coffee supplied.
Understanding the Answer
Let's break down why this is correct
Answer
The law of demand says that when the price of a good rises, people buy less of it, and when the price falls, they buy more. Imagine a coffee shop that raises the price of a latte from $3 to $4; customers will likely order fewer lattes because the higher price makes them think the latte is less affordable. Conversely, if the shop drops the price to $2, more people will buy lattes because they feel they are getting a better deal. This inverse relationship between price and quantity demanded is the core idea of the law of demand.
Detailed Explanation
When the price of coffee goes up, people buy less of it. Other options are incorrect because This mixes up demand with supply; This talks about income, not price.
Key Concepts
Law of Demand
Supply and Demand Relationship
Consumer Behavior
Topic
Demand and Supply Basics
Difficulty
easy level question
Cognitive Level
understand
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