21
QuizMultiple Choice

Business and Government — Test

Question 21 • Economics

How might consumers respond if an Internet service-providing company lowers the price of its services due to increased competition?

Answer
A
The subscription of the service will stop due to lower costs.
B
The government will intervene to raise prices in response to the competition.
C
The subscription of the service will likely grow due to lower costs.
D
The demand for the service will decrease irrespective of lower costs.

Explanation

When the company lowers its price, the service becomes more affordable to consumers. If other factors remain the same, more consumers are likely to subscribe, so subscriptions will likely grow. Lower costs do not normally cause demand or subscriptions to decrease or stop.

AI-written and checked against the verified answer.

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