ECONOMICS (CBSE/UGC NET)

ECONOMICS

DEMAND

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
price of related goods
A
supply
B
demand
C
Either A or B
D
None of the above
Explanation: 

Detailed explanation-1: -An increase in the price of a good will increase demand for its substitute, while a decrease in the price of a good will decrease demand for its substitute.

Detailed explanation-2: -law of supply all other factors being equal, there is a direct relationship between a good’s price and the quantity supplied; as the price of a good increases, the quantity supplied increases; similarly, as price decreases, the quantity supplied decreases, leading to a supply curve that is always upward sloping.

Detailed explanation-3: -For example, Coca-Cola and PepsiCo offer substitute soft drinks. If PepsiCo lowers its price, it can expect an increase in the quantity demanded for its soft drinks. Many consumers would now substitute Pepsi soft drinks for Coca-Cola soft drinks because they are substitutes. The demand for Coca-Cola would decrease.

There is 1 question to complete.