Asked by David Plata on Jul 12, 2024
Verified
A demand curve is built on the assumption that
A) income is derived from demand.
B) price remains the same, and fixed costs change.
C) everything but price and demand remains the same.
D) fixed costs change with quantity demanded.
E) the firm does not advertise.
Demand Curve
A graph that illustrates the relationship between the price of a good or service and the quantity demanded by consumers.
Price and Demand
Describes the relationship between the price of a good or service and the willingness of people to either buy or sell it at that price.
Assumption
A belief or statement taken for granted without proof, often serving as a basis for further reasoning or arguments.
- Comprehend the significance of price sensitivity and its impact on setting prices for goods and services.
Verified Answer
MG
MEGAN GANGITANOJul 14, 2024
Final Answer :
C
Explanation :
The demand curve is built on the assumption that everything else remains the same except for price and demand. This means that factors such as income, fixed costs, and advertising do not have an impact on the demand curve. The demand curve simply shows how much of a product consumers are willing and able to buy at different price points, assuming all other factors remain constant.
Learning Objectives
- Comprehend the significance of price sensitivity and its impact on setting prices for goods and services.