The price of a carton of milk went down by 25 cents today. What will probably happen to the quantity of milk demanded?
Question
The price of a carton of milk went down by 25 cents today. What will probably happen to the quantity of milk demanded?
Solution
When the price of a product decreases, the quantity demanded usually increases. This is based on the law of demand in economics, which states that, all else being equal, as the price of a product decreases, the quantity demanded increases. Therefore, it is likely that the quantity of milk demanded will increase due to the decrease in price.
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