ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Answer and Explanation: If there is a large decrease in the price of Powerade, A. There is a decrease in the demand for Gatorade, which results in a decrease in the price of Gatorade.

Detailed explanation-2: -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: -The Law of Demand In other words, the higher the price, the lower the level of demand. 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.

Detailed explanation-4: -Demand is generally considered to slope downward: at higher prices, consumers buy less. The point at which the two curves intersect represents the market-clearing price-the price at which demand and supply are the same. Prices can change for many reasons (technology, consumer preference, weather conditions).

Detailed explanation-5: -Increased prices typically result in lower demand, and demand increases generally lead to increased supply. However, the supply of different products responds to demand differently, with some products’ demand being less sensitive to prices than others.