Learning Path
Question & Answer
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A rise in the price of coffee leads to a decrease in the quantity of coffee demanded.
A decrease in the price of coffee leads to a decrease in the quantity of coffee supplied.
An increase in consumer income leads to the demand for coffee increasing.
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
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
Demand and Supply Basics
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Deep Dive: Demand and Supply Basics
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Definition
Demand and supply basics cover the fundamental concepts related to the quantities of a product that consumers are willing and able to purchase (demand) and the quantities that suppliers are willing to offer (supply) at different price levels. The law of demand and supply explains the inverse relationship between price and quantity demanded or supplied, leading to the formation of demand and supply curves.
Topic Definition
Demand and supply basics cover the fundamental concepts related to the quantities of a product that consumers are willing and able to purchase (demand) and the quantities that suppliers are willing to offer (supply) at different price levels. The law of demand and supply explains the inverse relationship between price and quantity demanded or supplied, leading to the formation of demand and supply curves.
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