If the price of a popular good rises, what is the likely consumer reaction?

Study for the VirtualSC Economics Honors Exam. Utilize flashcards and multiple-choice questions, each with hints and explanations. Get prepared for your exam!

When the price of a popular good rises, consumers typically respond by decreasing the quantity demanded of that good. This is aligned with the law of demand, which states that, all else being equal, as the price of a good increases, the quantity demanded decreases. Consumers often seek to minimize their expenses and will look for substitutes. For example, if the price of a favorite snack increases, some consumers may choose to buy less of that snack or opt for a different snack that offers a better value.

The distinction between quantity demanded and demand is crucial here. An increase in price leads to a movement along the demand curve, resulting in a decrease in quantity demanded, rather than a shift of the demand curve itself. A change in demand would indicate a change in consumer preferences or income levels, which is not directly related to price changes for that specific good. Thus, the correct reaction to a rise in price is that consumers will decrease the quantity they wish to purchase.

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