For each example, determine how the market for the good in bolded text will respond to the described change. Due to increases in hay prices, an input for raising cattle, the price of a gallon of 2% milk increases from $2.98 to $3.25. A company offers a coupon for $6 off the price of laser tag. A sharp increase in the price of wood causes increases in prices for dressers and desks. At a week‑long special at the grocery store, pork shoulder is on sale at $1.99/lb, down from $3.99/lb. A website offers a buy‑one‑get‑one‑free special for digital music albums. Answer Bank

Question

Sheldon Lambert

Business

1 October, 00:25

For each example, determine how the market for the good in bolded text will respond to the described change. Due to increases in hay prices, an input for raising cattle, the price of a gallon of 2% milk increases from $2.98 to $3.25. A company offers a coupon for $6 off the price of laser tag. A sharp increase in the price of wood causes increases in prices for dressers and desks. At a week‑long special at the grocery store, pork shoulder is on sale at $1.99/lb, down from $3.99/lb. A website offers a buy‑one‑get‑one‑free special for digital music albums. Answer Bank

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Roland Rubio · Answer 1

According to the law of demand, a rise in price leads to a decrease in quantity demanded and a fall in price leads to an increase in quantity demanded.

1. The price of a gallon of 2% milk has risen, therefore, quantity demanded decreases.

2. The price of laser tag has fallen, therefore, quantity demanded increases.

3. The price of dressers and desks has risen, therefore, quantity demanded decreases.

4. The price of pork shoulder has fallen from $3.99 per pound to $1.99 per pound, therefore, quantity demanded increases.

5. Another MP3 album comes free, with purchase of an MP3 album. This means the supplier have effectively halved the price. therefore, quantity demanded increases.