An increase in price all other things unchanged leads to ?
Correct answer: C. A contractions of demand
- A. Shift demand outwards
- B. Shift demand inwards
- C. A contractions of demand
- D. An extension of demand
Explanation
With other factors unchanged, a price increase causes a movement along the same demand curve and reduces quantity demanded, called a contraction of demand. A demand shift would result from a non-price factor such as income or preferences.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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