In an isolated economy, the only two factors that can directly affect the market price of a commodity are changes in its supply and changes in consumer demand. In such an economy, the total consumer demand is directly proportional to the population size.
If the statements above are true, then it is also true that in this isolatedeconomy:
(A) any increase in the market price of a commodity is the result of a decrease in its supply (Increase in price can also be a result of change in consumerdemand.)
(B) if the population size remains constant, an increase in the supply of a commodity will lead to a decrease in its market price (Correct. This takes into account both factors, and it keeps one factor constant while correctly inferring from the secondfactor.)
[color=#ed1c24] (C) if there is a decrease in the population size, then, other things being equal, the market price of commodities must increase (If population size decrease, then consumer demand decrease, so market price
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If the statements above are true, then it is also true that in this isolatedeconomy:
(A) any increase in the market price of a commodity is the result of a decrease in its supply (Increase in price can also be a result of change in consumerdemand.)
(B) if the population size remains constant, an increase in the supply of a commodity will lead to a decrease in its market price (Correct. This takes into account both factors, and it keeps one factor constant while correctly inferring from the secondfactor.)
[color=#ed1c24] (C) if there is a decrease in the population size, then, other things being equal, the market price of commodities must increase (If population size decrease, then consumer demand decrease, so market price
...
Statistics : Posted by vishal_gupta • on 22 Dec 2023, 06:01 • Replies 12 • Views 139
