Explain in detail how a decrease in consumer demand for a product will result in less of the product being produced and in fewer resources being allocated to its production
Please provide the best answer for the statement.
Given the supply schedule or supply curve, a decrease in consumer demand means less quantity demanded than was previously the case at each possible price. The demand curve shifts to the left.
Graphically, this will result in a new lower equilibrium quantity offered at a lower equilibrium price because consumers will not buy as much at the original equilibrium price. To eliminate a surplus at the old price, competing firms will lower the price until the quantity offered is just equal to the quantity demanded. This new quantity offered will not be as great as the original quantity. Because of less output, fewer resources will be needed.
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The psychological theory of the business cycle is
a. incorporated into practically all other theories of the cycle. b. held in disrepute by most economists. c. a complete explanation of the cycle. d. used only by monetary theorists.
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A. when price is $10. B. when price is below $10. C. when price is above $10. D. for every price.
The fact that common stockholders are residual claimants means the stockholders:
A. receive their dividends before any other residuals are paid. B. have a claim against the revenue that remains after everyone else is paid. C. are paid any past due dividends before other claims are paid. D. are paid before the bondholders but after any taxes are paid.