Question

As per law of demand, the quantity demanded of a normal product increases with _____

A Decrease in Price Correct Answer Incorrect Answer
B Increase in price Correct Answer Incorrect Answer
C Increase in Income Correct Answer Incorrect Answer
D Decrease in price of substitute good Correct Answer Incorrect Answer
E Increase in price of complement goods Correct Answer Incorrect Answer

Solution

Law of demand ·         It explains relationship between the quantity demanded of a commodity and its unit price. ·         As per it, demand varies inversely with price, other thing being equal. ·         rise in the price of a commodity or service is followed by a reduction in the quantity demanded and fall in the price is followed by extension in demand, with other conditions remaining the same.

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