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When would the price of a good be most likely to decrease?

a) High demand and low supply
b) Low demand and high supply
c) High demand and high supply
d) Low demand and low supply

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User Anabelle
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1 Answer

5 votes

Final answer:

The price of a good is most likely to decrease when there is low demand and high supply.

Step-by-step explanation:

The price of a good is most likely to decrease when there is low demand and high supply (option b). When there is low demand for a good, businesses may lower the price in order to attract more buyers. Additionally, when there is high supply of a good, businesses may lower the price to sell off excess inventory and prevent waste.

For example, let's say there is a surplus of smartphones in the market, meaning there is more supply than demand. In this case, smartphone manufacturers may lower the prices to encourage people to buy their products, thus decreasing the price of smartphones.

In a demand and supply diagram, a decrease in price due to low demand and high supply would be shown as a downward shift in the demand curve and an upward shift in the supply curve.

answered
User Rubiela
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