ECONOMICS
DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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as the price of the good falls, the quantity demanded decreases
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it reflects the marginal impact of spending for the good
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tastes and preferences change over time
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substitute goods revery often not readily available
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as the price of the good falls, the quantity demanded increases
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Detailed explanation-1: -According to this principle, the marginal utility of a commodity reduces when the quantity of goods is more. Consequently, when the quantity is more, the prices will fall and demand will increase. Hence, consumers will demand more goods when prices are less. This is why the demand curve slopes downwards.
Detailed explanation-2: -When the price of commodity increases, its demand decreases. Similarly, when the price of a commodity decreases its demand increases. The law of demand assumes that the other factors affecting the demand of a commodity remain the same. Thus, the demand curve is downward sloping from left to right.
Detailed explanation-3: -If the price decreases, quantity demanded increases. This is the Law of Demand. On a graph, an inverse relationship is represented by a downward sloping line from left to right.
Detailed explanation-4: -The slope of the demand curve (downward to the right) indicates that a greater quantity will be demanded when the price is lower. On the other hand, the slope of the supply curve (upward to the right) tells us that as the price goes up, producers are willing to produce more goods.
Detailed explanation-5: -It slopes downward because of the wealth effect on consumption, the interest rate effect on investment, and the international trade effect on net exports. The aggregate demand curve shifts when the quantity of real GDP demanded at each price level changes.