- List the 3 reasons that price and quantity demanded are inversely related, all else equal...

- List the 3 reasons that price and quantity demanded are inversely related, all else equal (i.e., the Law of Demand). Give an example of each with an explanation of how your example helps explain the Law of Demand.

- When lettuce prices doubled, from about $1.50 per head to about $3.00, the reaction of one consumer was quoted in a newspaper article: “I will not buy [lettuce] when it’s $3 per head,” she said, adding that other green vegetables can fill in for lettuce. “If bread were $5 per loaf we’d still have to buy it. But lettuce is not that important in our family.” For this consumer’s household, which product has the higher price elasticity of demand: bread or lettuce? Explain.

Expert Solution

Rahul Sunny answered 2 years ago

Q1 - Why is price inversely related to quantity demanded? ( substitution effect and or income...

Q1 - Why is price inversely related to quantity demanded? ( substitution effect and or income effect.)

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