The longer the adjustment period, the greater the consumers ability to substitute relatively higher-priced products with lower-priced substitutes.

DEMAND

Please wait while the activity loads.
If this activity does not load, try refreshing your browser. Also, this page requires javascript. Please visit using a browser with javascript enabled.

If loading fails, click here to try again

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

The longer the adjustment period, the greater the consumers’ ability to substitute relatively higher-priced products with lower-priced substitutes.

A	True
B	False
C	Either A or B
D	None of the above

Explanation:

Detailed explanation-1: -The longer the adjustment period, the greater the consumers’ ability to substitute relatively higher-priced products with lower-priced substitutes. Demand for cigarettes among teenage smokers is less elastic than that of adult smokers. Elasticity of demand values are sorted into four categories.

Detailed explanation-2: -A decrease in the price of substitute goods leads to an decrease in the demand for given commodity and vice versa. Eg., if price of a substitute good (say coffee) decreases, then demand for given commodity (say tea) will fall, so demand for a given commodity is directly affected by change in price of substitute goods.

Detailed explanation-3: -The demand for a good increases, if the price of one of its substitutes rises. The demand for a good decreases, if the price of one of its substitutes falls. A good that is consumed with another good.

Detailed explanation-4: -The substitution effect occurs when consumers react to an increase in a good’s price by consuming less of that good and more of other goods.

There is 1 question to complete.

ECONOMICS (CBSE/UGC NET)

ECONOMICS

DEMAND