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
Answer (1)
17th Jan, 2024
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.
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