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

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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

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