Question : Assertion: When the price of a product decreases, its quantity demanded increases.
Reason: The law of demand states an inverse relationship between price and quantity demanded.
Option 1: Both the assertion and reason are correct and related.
Option 2: Both the assertion and reason are correct but not related.
Option 3: The assertion is correct, but the reason is incorrect.
Option 4: The assertion is incorrect, but the reason is correct.
Correct Answer: Both the assertion and reason are correct and related.
Solution : The correct answer is (A) Both the assertion and reason are correct and related.
The assertion states that when the price of a product decreases, its quantity demanded increases. This is correct. According to the law of demand, there is an inverse relationship between the price of a product and the quantity demanded. When the price of a product decreases, consumers generally find it more affordable, leading to an increase in the quantity demanded.
The reason provided states that the law of demand states an inverse relationship between price and quantity demanded. This reason is correct and directly supports the assertion. The law of demand is a fundamental principle in economics that states that, all else being equal, there is an inverse relationship between the price of a product and the quantity demanded. When the price decreases, the quantity demanded tends to increase, and vice versa.
Therefore, both the assertion and reason are correct and related. The decrease in price leads to an increase in quantity demanded, as stated by the reason, which aligns with the assertion based on the law of demand.
Related Questions
Trending Articles/News
