The Impact of Ice Cream Price Increase on Demand for Ice Cream Cones
What is the likely effect of an increase in the price of ice cream on the demand for ice cream cones?
a. decrease the demand for ice cream cones.
b. increase the demand for ice cream cones.
c. increase the price of ice cream cones.
d. increase the supply of ice cream cones.
Answer:
The increase in the price of ice cream is likely to decrease the demand for ice cream cones.
Explanation:
An increase in the price of ice cream is likely to decrease the demand for ice cream cones. This is because when the price of ice cream increases, people may be less willing to pay for it or may buy less of it. As a result, they will also demand fewer ice cream cones. For example, if the price of ice cream doubles, some people may decide to buy fewer ice creams altogether or eliminate it from their budget, which will reduce the demand for ice cream cones.
It is important to understand the relationship between price and demand in economics. When the price of a product or service goes up, the quantity demanded for that product or service usually goes down. This principle is known as the law of demand.