At a price of $5.95, a brand new fiction novel has recently been published. If the novel is offered for sale at a price of $2.95, then the publisher can expect the demand for the book to

Question

BlackTom AI · Accepted Answer

The question presents a price–quantity relationship for a newly published fiction novel. 
Option 1: 'Decrease' would imply that lowering the price from $5.95 to $2.95 reduces demand, which contradicts the basic law of demand in most markets where, all else equal, a lower price increases quantity demanded. 
Option 2: 'It is impossible to predict the effect of a lower price on sales' suggests no predictable relationship between price and demand, but standard economic theory assumes a downward-sloping demand curve for normal goods, making a predictable increase in quantity demanded when price falls. 
Option 3: 'Increase' aligns with the law of demand: when the price falls from $5.95 to $2.95, more consumers are willing to buy the book, and the quantity demanded typically rises. This reflects the substitution and income effects that accompany a lower price. 
Option 4: 'Stay the same' would mean quantity demanded does not respond to a price change, which would violate the common behavior described by the demand curve for most goods, including books, unless there are special circumstances like perfect inelasticity, which is rare in consumer paperback purchases. 
In summary, given standard demand behavior for a new fiction novel, lowering the price should lead to an increase in the quantity demanded, not a decrease, an unpredictable effect, or no effect at all.

ECO FE 03310300 Cumulative Practice Exam 1

At a price of $5.95, a brand new fiction novel has recently been published. If the novel is offered for sale at a price of $2.95, then the publisher can expect the demand for the book to

View Explanation

Log in for full answers

Similar Questions

In a consumer society, many adults channel creativity into buying things

Economic stress and unpredictable times have resulted in a booming industry for self-help products

People born without creativity never can develop it

A product has a selling price of $20, a contribution margin ratio of 40% and fixed cost of $120,000. To make a profit of $30,000. The number of units that must be sold is: Type the number without $ and a comma. Eg: 20000

Which of the following statement regarding cost is correct:

Under the assumptions used in cost-volume-profit analysis, as the activity increases:

The CVP and break-even analysis are supported by a range of important assumptions. Which of the following is not an assumption of the CVP:

The break-even point is that at which:

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler