Suppose that in this city, the price of a spaghetti dinner changes from $10 to $15. Which of the following statements correctly describes what happens in the calculator?

I. There is a reduction in the number of dinners that people buy.
II. There is a reduction in demand.
III. The point showing price and quantity slides along the demand curve.
IV. The demand curve shifts.



A. I, II, and IV

B. I and II

C. II and IV

D. I and III

If III means the curve does not shift, I would eliminate that one and go for A.

Sra

To determine the correct statement, let's break down each option and see which one accurately describes what happens in the situation described.

I. There is a reduction in the number of dinners that people buy.
This statement is true. When the price of a spaghetti dinner increases from $10 to $15, it is likely that fewer people will be willing to buy the dinners, resulting in a reduction in the quantity demanded.

II. There is a reduction in demand.
This statement is also true. When the price of a product increases, it generally leads to a decrease in demand. So, a higher price could lead to a reduction in the overall demand for spaghetti dinners.

III. The point showing price and quantity slides along the demand curve.
This statement is not accurate. When the price of a product changes, it does not cause the point representing the price and quantity to slide along the demand curve. Instead, it leads to a movement along the demand curve itself.

IV. The demand curve shifts.
This statement is not true in this case. A shift in the demand curve would occur when there is a change in factors other than price that affect the quantity demanded. In this situation, the price of the spaghetti dinner changed, but no other factors were mentioned.

Based on this analysis, the correct statement is:

B. I and II