Suppose Amazon is having a big sale today on all clothing and electronics items. Wewould expect this to increase demand for these products since they are cheaper.O False, since a sale is a price decrease it would not increase demand but move to another point onthe curve.O True, consumers are irrational and will want to buy more when there is a sale.O True, demand increases whenever customers see prices dropping.O False, the sale would decrease demand because consumers would expect sale prices from nowon.

Answered: Suppose Amazon is having a big sale…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose Amazon is having a big sale today on all clothing and electronics items. We
would expect this to increase demand for these products since they are cheaper.
O False, since a sale is a price decrease it would not increase demand but move to another point on
the curve.
O True, consumers are irrational and will want to buy more when there is a sale.
O True, demand increases whenever customers see prices dropping.
O False, the sale would decrease demand because consumers would expect sale prices from now
on.

Expert Solution

Step 1: Define law of demand

The law of demand explains that, all else being equal, as the price of a product or service rises, the quantity demanded for that product service decreases, and vice versa. In other words, there is an opposite connection between price and quantity demanded.

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