The Impact of Price Reduction on GPS Systems

What will happen if there is a decrease in the price of GPS systems?

a. an increase in the supply of GPS systems

b. a smaller quantity of GPS systems supplied

c. a larger quantity of GPS systems supplied

d. a decrease in the demand for GPS systems

Answer:

c. a larger quantity of GPS systems supplied

When the price of GPS systems decreases, it will result in a larger quantity of GPS systems being supplied. This is because price reductions typically lead to an increase in supply, as businesses are encouraged to produce and offer more of the product at the lower price.

The decrease in price can stimulate production and distribution of GPS systems, ultimately leading to a larger quantity of the product being supplied to the market.

According to the Law of Supply, there is a direct relationship between price and quantity supplied. As the price decreases, the quantity supplied tends to increase.

Overall, the decrease in the price of GPS systems is likely to have a positive effect on the supply of these systems, benefiting consumers who may have a greater variety of options to choose from at more affordable prices.