Consider the following statements:

a. Consumers buy more MP3 players from an electronics store that sells MP3 players at a lower price than other rival electronics stores in the area.

b. Schools take steps to increase security since they believe it is more costly to allow vandalism than to hire additional security guards.

c. Citrus growers produce more oranges when the selling price of oranges falls.

Which of the above statements demonstrates that economic agents respond to incentives?

Question

Business

Yair Wilkinson

10 August, 12:52

Consider the following statements:

a. Consumers buy more MP3 players from an electronics store that sells MP3 players at a lower price than other rival electronics stores in the area.

b. Schools take steps to increase security since they believe it is more costly to allow vandalism than to hire additional security guards.

c. Citrus growers produce more oranges when the selling price of oranges falls.

Which of the above statements demonstrates that economic agents respond to incentives?

+1

Answers (1)

Know the Answer?

Liam Galvan · Answer 1

A. Consumers buy more MP3 players from an electronics store that sells MP3 players at a lower price than other rival electronics stores in the area.

Explanation:

Economic agents are known as people, company or organizations that have an influence on the economy by producing, buying, or selling. In this case the agent is the consumer and he responds to the incentive of lower prices by buying at that specific store.