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Multiple Choice
An increase in the demand for music downloads indicates that more music downloads are:
A
being supplied by producers
B
purchased only at higher prices
C
available for free
D
desired at every possible price
Verified step by step guidance
1
Understand the concept of demand in microeconomics: Demand refers to the quantity of a good or service that consumers are willing and able to purchase at various prices during a given period.
Recognize that an increase in demand means that at every possible price, consumers want to buy more of the good than before. This is represented by a rightward shift of the demand curve.
Note that an increase in demand does not necessarily mean that more is being supplied by producers; supply is a separate concept and depends on producers' willingness and ability to sell.
Understand that an increase in demand does not imply that purchases happen only at higher prices; rather, consumers desire more at all price levels, not just at higher prices.
Conclude that the correct interpretation of an increase in demand is that the good is desired at every possible price, which aligns with the concept of a demand curve shifting to the right.