A set of collectible dolls was very popular during the holiday season, but, as is the case with many toy fads, has dropped off significantly in the following months. A surplus of dolls now lines the shelves of retailers across the country. In the absence of government intervention, what is likely to occur?(1 point)
Responses
The low price brought about by a decrease in demand will incentivize producers to increase the quantity of dolls supplied to the market.
The low price brought about by a decrease in demand will incentivize producers to increase the quantity of dolls supplied to the market.
The high price brought about by an increase in demand will incentivize producers to increase the quantity of dolls supplied to the market.
The high price brought about by an increase in demand will incentivize producers to increase the quantity of dolls supplied to the market.
The high price brought about by an increase in demand will incentivize producers to decrease the quantity of dolls supplied to the market.
The high price brought about by an increase in demand will incentivize producers to decrease the quantity of dolls supplied to the market.
The low price brought about by a decrease in demand will incentivize producers to decrease the quantity of dolls supplied to the market.
The low price brought about by a decrease in demand will incentivize producers to decrease the quantity of dolls supplied to the market.
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1 answer
In this scenario, the correct response would be:
The low price brought about by a decrease in demand will incentivize producers to decrease the quantity of dolls supplied to the market.
As demand decreases, prices tend to fall, which can lead producers to reduce their supply since they may not find it profitable to produce as many dolls at the lower prices.
