A recent diet trend has made snack cakes far less popular than they once were. As such, demand for snack cakes is expected to fall. As demand falls, _____.(1 point)

Question

Responses

consumers face lower prices, and are encouraged to consume more
consumers face lower prices, and are encouraged to consume more

consumers face higher prices, and are encouraged to consume less
consumers face higher prices, and are encouraged to consume less

producers make lower profits, and some will exit the market
producers make lower profits, and some will exit the market

producers make higher profits, and more will enter the market

Answer 1

As demand falls, the most appropriate response is:

producers make lower profits, and some will exit the market.

When demand decreases, prices generally decline, which can lead to lower profits for producers. If profits become unsustainable, some producers may decide to exit the market.