Question

(01.04 MC)

Graph with x axis labeled Quantity Demanded and numbered in hundreds, 100 to 500. Y axis is Price, with prices 0 to 6. A line representing the Demand Curve starts at 100, 5 and drops at an angle down to 500, 1. Dashed lines extend from the x and y axes to point A 10, 15. Solid lines extend upward from the x axis to the green line at points 100, 5, 200, 4, 300, 3, 400, 2, and 500, 1.

© Public Domain



Based on the graph, what would happen if customers demanded 550 units of this product?
The price would drop to 0.5.
The quantity would be 0.
The quantity would be 0.5.
The price would rise to 2.

Answer 1

Answer:

A. The price would drop to 0.5.

Explanation:

The graph shows that for every increase of 100 units of the goods demanded, price reduces by 1 unit.

When 500 units was demanded, the price was at 1. Therefore, if 550 units are demanded, the price will reduce by half, which means the price would drop to 0.5.