Answer:
The correct answer is D. The situation that best illustrates an effect of the law of demand is that a theater sells more popcorn after it lowers the price of popcorn.
Explanation:
The law of supply and demand is the fundamental pillar of capitalist economic theory. This theory establishes that the demand for a good or service will be determined by its price, while the higher the price, the more restrictive its access will be and therefore the lower its demand; while on the contrary, the lower the price, the higher the demand, as it will be more accessible. Therefore, the fact that the theater lowers the price of its popcorn and consequently increases its sales is a clear example of the operation of this law.
According to the law of demand, amount purchased is proportional to price. In other words, the lower the amount required, the greater the price. The reason for this is because marginal utility is dwindling.
Correct option is A.
The situation best illustrates an effect of the law of demand is that "A restaurant loses customers when a similar restaurant opens nearby."
When prices vary, the law of demand explains consumer behavior. When the price of a good rises in the market, assuming all other factors affecting demand remain constant, the demand for that good falls. This is a natural consumer decision-making process.
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