--%>
Assignment Help - homework help

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 : Reducing output of other good When the

    When the production possibilities frontier in a proficient economy is not growing, raising the output of one good always needs: (i) Increasing the output price for the other good. (ii) Bigger amounts of resources. (iii) Decreasing the output of other

    		•
  • Q : What are the Causes and theories of

    What are the Causes and theories of inflation?

    		•
  • Q : Allocative Mechanisms-market based

    The market-based economic system: (1) Appears to be ‘natural’ as it has existed in all societies. (2) Has dominated the economic relationships in United States since from the year1492. (3) Guided resource allocation in middle ages. (4) Is

    		•
  • Q : Scientific method how does it relate to

    What is the scientific method and how does it relate to theoretical economics?  What is the difference between a hypothesis and an economic law or principle?

    		•
  • Q : Formally adopt inflation targeting

    Question: Why might it be difficult for the Fed to formally adopt inflation targeting?  Would inflation targeting be a good policy for the Fed in the present economic environment? Answer:

  • Q : Next Generation Manufacturing Strategy

    This Assignment assesses the following module Learning Outcomes:1. Describe current production concepts and techniques in formulating a manufacturing strategy.2. Discuss the development and implementation of manufacturing strategies in the busi

    		•
  • Q : Prices are the automatic regulator

    “Prices are the automatic regulator that tends to keep production and consumption in line with each other.”  Explain.

    		•
  • Q : Explain the markets and prices of the

    Explain the markets and prices of the Market System?

    		•
  • Q : Market system automatically adjustment

    Concept of Adam Smith that the market system automatically adjusts as when guided through an “invisible hand” most intimately resembles: (1) flows of electricity across the microcircuits within computer chips. (2) homeosta

    		•
  • Q : Distinction between Component cost and

    Describe briefly Distinction between the term Component cost and Composite cost?

    		•