Answered: If you buy less clothing because the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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If you buy less clothing because the price of clothing at your favorite store has gone up, what are you experiencing?

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Step 1

Consumption of products and services in the economy by consumers is referred to as demand. Demand, in its most basic form, refers to the quantity of a good that consumers are willing and able to consume at various prices during a certain time period. The price is drawn on the y-axis, and the quantity demanded is plotted on the x-axis, to reflect demand. The demand curve is a downward sloping curve that indicates a negative relationship between price and quantity desired; an increase in price demotivates customers to consume the good, while a fall in price encourages them to consume more.

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