CA Foundation Exam  >  CA Foundation Questions  >  Expansion and contraction in demand are cause... Start Learning for Free
Expansion and contraction in demand are caused by:
  • a)
    Change in income of buyer 
  • b)
    Change in taste and preference of buyer 
  • c)
    Change in price of the commodity 
  • d)
    Change in price of related goods.
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
Expansion and contraction in demand are caused by:a)Change in income o...
Change in price of the commodity:
When the price of a commodity increases, demand tends to decrease as consumers are less willing or able to purchase the product at a higher price. This results in a contraction in demand. On the other hand, when the price of a commodity decreases, demand typically increases as consumers are more inclined to purchase the product at a lower price, leading to an expansion in demand.

Factors affecting price changes:
- Changes in production costs
- Changes in government policies or taxes
- Natural disasters affecting supply
- Changes in technology impacting production costs

Impact on demand:
- Inelastic goods: Goods with limited substitutes tend to have less of an impact on demand with price changes.
- Elastic goods: Goods with many substitutes are more likely to see a significant change in demand with price fluctuations.

Price elasticity of demand:
- Elastic demand: Demand changes significantly with price changes.
- Inelastic demand: Demand remains relatively stable regardless of price changes.

Overall impact:
- The price of a commodity plays a crucial role in determining the level of demand in the market. Understanding how price changes affect demand is essential for businesses to make informed decisions regarding pricing strategies and production levels.
Explore Courses for CA Foundation exam
Expansion and contraction in demand are caused by:a)Change in income of buyerb)Change in taste and preference of buyerc)Change in price of the commodityd)Change in price of related goods.Correct answer is option 'C'. Can you explain this answer?
Question Description
Expansion and contraction in demand are caused by:a)Change in income of buyerb)Change in taste and preference of buyerc)Change in price of the commodityd)Change in price of related goods.Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Expansion and contraction in demand are caused by:a)Change in income of buyerb)Change in taste and preference of buyerc)Change in price of the commodityd)Change in price of related goods.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Expansion and contraction in demand are caused by:a)Change in income of buyerb)Change in taste and preference of buyerc)Change in price of the commodityd)Change in price of related goods.Correct answer is option 'C'. Can you explain this answer?.
Solutions for Expansion and contraction in demand are caused by:a)Change in income of buyerb)Change in taste and preference of buyerc)Change in price of the commodityd)Change in price of related goods.Correct answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation. Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of Expansion and contraction in demand are caused by:a)Change in income of buyerb)Change in taste and preference of buyerc)Change in price of the commodityd)Change in price of related goods.Correct answer is option 'C'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of Expansion and contraction in demand are caused by:a)Change in income of buyerb)Change in taste and preference of buyerc)Change in price of the commodityd)Change in price of related goods.Correct answer is option 'C'. Can you explain this answer?, a detailed solution for Expansion and contraction in demand are caused by:a)Change in income of buyerb)Change in taste and preference of buyerc)Change in price of the commodityd)Change in price of related goods.Correct answer is option 'C'. Can you explain this answer? has been provided alongside types of Expansion and contraction in demand are caused by:a)Change in income of buyerb)Change in taste and preference of buyerc)Change in price of the commodityd)Change in price of related goods.Correct answer is option 'C'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Expansion and contraction in demand are caused by:a)Change in income of buyerb)Change in taste and preference of buyerc)Change in price of the commodityd)Change in price of related goods.Correct answer is option 'C'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
Explore Courses for CA Foundation exam

Top Courses for CA Foundation

Explore Courses
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev