Author Question: The quantity of a good that consumers demand depends only on the price of the good. Indicate ... (Read 32 times)

kwoodring · **on:** Jul 1, 2018

The quantity of a good that consumers demand depends only on the price of the good.

Indicate whether the statement is true or false

Question 2

Because people prefer name-brand pain-relieving drugs over store-brand pain-relieving drugs, demand curves do not slope downward for pain-relieving drugs.

Indicate whether the statement is true or false

bulacsom · **Reply #1 on:** Jul 1, 2018

Answer to Question 1

False. The quantity of a good demanded depends on many factors including: its own price, consumers' incomes, and the price of related goods.

Answer to Question 2

False. Demand curves slope downward assuming all other factors do not change. Consumers may view brand-name drugs to be of higher quality than store-brand drugs, and therefore the demand curve for brand-name drugs lies to the right of the demand curve for store-brand drugs.