Question : Demand contraction occurs when:
Option 1: Price falls but demand remains stable
Option 2: Price rises and demand falls
Option 3: Price remains stable and demand falls
Option 4: Price rises and demand also rises
Correct Answer: Price rises and demand falls
Solution : A condition of contracting demand occurs when the amount of a commodity desired declines as a result of an increase in the product's own price, all other factors staying constant. Hence option b is the correct answer.
Question : The law of demand states that when _____.
Question : For an inferior good , demand falls when
Question : Perfectly inelastic demand occurs when the price elasticity of demand is:
Question : When price of a substitute of commodity 'x' falls, the demand for 'x':
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