SSC
GENERAL ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A consumer may not want to buy a lower-priced item because
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A lower price could mean lower quality
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They earn a high income
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Either A or B
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None of the above
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Explanation:
Detailed explanation-1: -If a consumer believes they are getting a good deal, then lower prices can help get you the sale. On the other hand, low prices can also give the impression that the product is of low quality.
Detailed explanation-2: -As the price of a commodity falls, the consumer has to spend less on purchase of that commodity with money saved by them and hence, the consumer can buy more quantity of that commodity. This is called an income effect.
Detailed explanation-3: -Income is not the only factor that causes a shift in demand. Other things that change demand include tastes and preferences, the composition or size of the population, the prices of related goods, and even expectations.
There is 1 question to complete.