--%>

Larger amount is actually purchased at a higher price

Critically evaluate:  “In comparing the two equilibrium positions, it note that a larger amount is actually purchased at a higher price. This disprove the law of demand.”

E

Expert

Verified

The key point here is that the second equilibrium occurs after demand has increased, that is demand has shifted. Every equilibrium price describes a different demand situation.  Therefore, the fact that more is purchased at a higher price when demand increases does not refute the law of demand.  Note that on the second demand curve and schedule, more would still be purchased at a lower price.

   Related Questions in Business Economics

  • Q : Problem regarding supplies-demands and

    The new supply and demand curves within University City are S0 and D0. But after the county commission imposed a $3 per six-pack excise tax upon beer: (1) demand fell to D1 from the perspectives of beer dealers. (2) co

  • Q : What happens in the product markets

    What happens in the product markets?

  • Q : Need urgent help need urgent help in

    need urgent help in business economics, please suggest

  • Q : What do you mean by Graphs What do you

    What do you mean by Graphs?

  • Q : Speculators activities over the long-run

    Over the long-run the speculators activities are tend to: (1) decrease the volatility of prices. (2) attract legal attention and result in imprisonment. (3) increase the level and volatility of prices both. (4) yield tremendous profits and raise costs

  • Q : Specialization and trade according to

    Not between concepts explained in Adam Smith’s Wealth of Nations was the conception which net benefits occur from: (1) specialization and trade according to comparative advantage. (2) the division of labor in production processes. (3) reliance o

  • Q : Market structure and pricing decision

    Just need help to see if I am in the right direction if there any think wrong need help with it.

  • Q : Speculators decreases price volatility

    Speculators decrease price volatility through, in effect, changing demand curves: (w) out at low prices, and shifting supply curves out at high prices. (x) out at low prices, and shifting supply curves within at low p

  • Q : Illustrations of opportunity costs

    Illustrations of opportunity costs which you might or will have incurred would comprise: (i) severe injuries suffered within an accident since you failed to buckle up. (ii) the income you could earn when you were not in school. (iii) time spent studyi

  • Q : Assertion to increase in the minimum

    Use the circular flow model to confirm this assertion for a $1 per hour increase in the minimum wage?