Respuesta :
Even though you didn't share the graph, it is well known fact that you can came across while studying business' aspects - as prices fall, demand stays the same due to the fact that no agent has an incentive to change its behavior.
And what about the second question, the answer is Q needs to be coordinated with supply so as not to cause the collapse of production
And what about the second question, the answer is Q needs to be coordinated with supply so as not to cause the collapse of production
Answer: As prices fall, demand goes up.
The price of the good needs to be increased.
Explanation:
According to the law of demand, the quantity demand for a good is inversely related to its own price. So, when price falls quantity demanded for the good must go up and when price rises quantity demanded for the good must fall.
When price P2 is lower than the equilibrium price there is disequilibrium in the economy. At P2, demand for the good is greater than its supply. So, in order to achieve equilibrium price of the good needs to be increase till demand for the good is equal to its supply.