Chapter 5, Problem 7MCQ

To determine

The question requires us to determine the cause which will increase the demand for diapers.

Explanation of Solution

The quantity demanded and the prices of the good have a negative relationship, in accordance with the law of demand. The demand for the goods will decline as the price rises while the quantity demanded will increase when the price falls.

So, a decrease in the price of disposable diapers will cause the demand for disposable diapers to increase.

Option “e” is correct.

Economics Concept Introduction

The demand for a commodity will change due to the following reasons:

• Change in price of relative goods (substitutes and complementary products)
• Change in taste and preferences
• Change in peoples’ income level
• Change in expectations
• Change in the number of consumers

Any change in the price of the commodity changes the quantity demanded.