Question

conduct a market survey to see how market prices affect consumers willingness to buy. ask 15 people how many 1-pound bags of hershey kisses they would be willing and able to buy at $0.75 per bag. record the results. ask the same group of people how many bags they would be willing and able to buy at $1.50 per bag. record this price and quantity. now raise the price to $2.00 per bag and record the responses. finally, raise the price to $4.00 per bag and record the price and quantity. prepare a table that summarizes the price and quantity combinations from highest price to lowest price.

1. what happens to quantity demanded as price goes up?
2. what happens to quantity demanded as price goes down?
3. what kind of mathematical relationship is there between price and quantity demanded?

Explanation:

1. This follows the law of demand, where higher prices reduce consumers' willingness/ability to purchase a good.
2. This also aligns with the law of demand, as lower prices make the good more affordable and desirable to consumers.
3. This inverse relationship means as one variable increases, the other decreases, which is a core principle of demand.

Answer:

1. Quantity demanded decreases.
2. Quantity demanded increases.
3. There is an inverse (negative) mathematical relationship.