Analysis of Statement Lower Prices will Result in Fewer Units being Supplied
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Question
What’s wrong with this way of thinking? “Economists argue that lower prices will result in fewer units being supplied. However, there are exceptions to this rule. For example, in 1972, a very simple 10-digit electronic calculator sold for $120. By 2000, the price of the same type of calculator had declined to less than $5. Yet business firms produced and sold many more calculators in 2000 than they did in 1972. Lower prices did not result in less production or in a decline in the number of calculators supplied.”
Summary
This question belongs to economics and discusses about the effect of lower prices resulting in fewer units being supplied.
Word count: 266
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