ECONOMICS
DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Go down
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Go up
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Stay the same
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None of the above
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Detailed explanation-1: -An increase in income results in an increase in the demand for goods and services while a decrease in income results in a decrease in demand; though not always.
Detailed explanation-2: -Decrease in demand may occur due to the following reasons: (i) A goods has gone out of fashion or the tastes of the people for a commodity have declined. (ii) Incomes of the consumers have fallen. (iii) The prices of the substitutes of the commodity have fallen. (v) The propensity to consume of the people has declined.
Detailed explanation-3: -A Market Shortage occurs when there is excess demand-that is quantity demanded is greater than quantity supplied. In this situation, consumers won’t be able to buy as much of a good as they would like.