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Homework answers / question archive / At a price of $12, Sam buys 10 units of a product; when the price increases to $16, Sam buys 8 units
At a price of $12, Sam buys 10 units of a product; when the price increases to $16, Sam buys 8 units. Jennifer says Sam's demand has decreased. Is Jennifer correct?
a. Yes, Jennifer is correct. Sam's demand has decreased.
b. No, Jennifer is incorrect. Sam's demand has increased.
c. No, Jennifer is incorrect. Sam's quantity demanded has decreased, and his demand has not changed.
d. No, Jennifer is incorrect. Sam's quantity demanded has increased, and his demand has increased.
Holding everything else equal, a change in the price of a product causes a movement along the demand curve. When the price of a product increases, the quantity demanded of it decreases, and the opposite is true. This movement along the demand curve makes the demand remain unchanged. When other factors other than price changes, they cause a shift in the demand curve. A rightward ward shift of the demand curve signifies an increase in demand, while a leftward shift denotes a decrease in demand.
