ECONOMICS
DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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it goes up
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it goes down
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it stays the same
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it is not effected
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Detailed explanation-1: -The law of demand states that a higher price leads to a lower quantity demanded and that a lower price leads to a higher quantity demanded.
Detailed explanation-2: -If the price goes up, the quantity demanded goes down (but demand itself stays the same). 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-3: -An increase in demand will cause an increase in the equilibrium price and quantity of a good.
Detailed explanation-4: -Because buyers have finite resources, their spending on a given product or commodity is limited as well, so higher prices reduce the quantity demanded. Conversely, demand rises as the product becomes more affordable. As a result, demand curves slope downward from left to right, as in the chart below.
Detailed explanation-5: -The correct option is D. Extension of demand. When the price of the commodity falls, its demand expands which is technically termed as the extension of demand.