Question : Assertion (A): The demand curve for the market is flatter than the demand curve for an individual.
Reason (R): By horizontally summing individual demand, the market demand curve is created.
Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation
of Assertion (A)
Option 2: Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation
of Assertion (A)
Option 3: Assertion (A) is true but Reason (R) is False
Option 4: Assertion (A) is False but Reason (R) is True
Correct Answer:
Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation
of Assertion (A)
Solution :
Compared to individual demand curves, the market demand curve is flatter.
This occurs because when prices fluctuate, market demand changes proportionately more than individual demand changes proportionately more.
The separate demand curves are horizontally added to produce the market demand curve. the total amount of a commodity that all consumers are willing to purchase over a specific time period at a specific price.
Hence option b is the correct answer.
