ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Thus the increase in price of the batteries raises the demand for electricity. If electricity and batteries were complements, then the increase in the price of batteries would have reduced the demand for electricity.

Detailed explanation-2: -A higher price for batteries would increase the demand for electricity. (Flashlights are generally not sold with batteries.

Detailed explanation-3: -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-4: -Demand Increase: price increases, quantity increases. Demand Decrease: price decreases, quantity decreases. Supply Increase: price decreases, quantity increases. Supply Decrease: price increases, quantity decreases.

Detailed explanation-5: -An increase in demand and a decrease in supply will cause an increase in equilibrium price, but the effect on equilibrium quantity cannot be detennined. 1. For any quantity, consumers now place a higher value on the good, and producers must have a higher price in order to supply the good; therefore, price will increase.