ECONOMICS (CBSE/UGC NET)

ECONOMICS

SUPPLY

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]

When the price of Nike brand shoes increases, we will probably go purchase a brand like Adidas or Pumas instead. Which of the following best explains this behavior?

A	Substitution Effect
B	Income Effect
C	Complement Goods
D	Consumer expectations

Explanation:

Detailed explanation-1: -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-2: -If there is an increase in demand ( D) the demand curve moves to the RIGHT. When we say that the demand curves shift to the right, it means that we have to change the numbers on the demand schedule. For the same prices, the quantities increase. This shifts the curve to the RIGHT.

Detailed explanation-3: -If a buyer expects the price of a good to go down in the future, they hold off buying it today, so the demand for that good today decreases. On the other hand, if a buyer expects the price to go up in the future, the demand for the good today increases.

Detailed explanation-4: -The demand for a good increases or decreases depending on several factors. This includes the product’s price, perceived quality, advertising spend, consumer income, consumer confidence, and changes in taste and fashion.

There is 1 question to complete.