The Impact of Increasing Olive Oil Prices on Demand

What happens to the demand for olive oil when the price increases?

When the price of olive oil increases:

a. The demand for olive oil decreases

Answer:

When the price of olive oil increases, the demand for olive oil decreases.

When the price of a good rises, such as olive oil, people tend to buy less of it, assuming all other factors remain constant. This concept is known as the law of demand. Therefore, when the price of olive oil increases, consumers may seek out cheaper alternatives or reduce their usage of olive oil.

It is important to note that the decrease in demand for olive oil does not necessarily mean that the demand for other types of oil, such as corn oil, will increase. The demand for corn oil can be influenced by various factors other than just the price of olive oil.

Without information about the quantity supplied or any changes in supply, it is not possible to determine if there will be any change in the quantity demanded for olive oil or if the quantity demanded for olive oil will actually increase when the price rises.

In summary, when the price of olive oil increases, the demand for olive oil decreases due to the law of demand and consumer behavior.