Commerce Exam > Commerce Questions > Direction: In the following questions, a sta...
Start Learning for Free
Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:
Assertion (A): Increase or decrease in demand causes a change in the price of the commodity. Equilibrium quantity remains constant.
Reason (R): When demand increases more than supply, equilibrium price will increase.
- a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).
- b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).
- c)Assertion (A) is true, but Reason (R) is false.
- d)Assertion (A) is false, but Reason (R) is true.
Correct answer is option 'C'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Verified Answer
Direction: In the following questions, a statement of Assertion (A) i...
An increase in demand while the supply remains unchanged causes equilibrium price and quantity to increase. Due to increase in demand the quantity demanded will increase this will thereby increase competition in the market which will leaf to increase in price of the product. hence, when the price increases demand decreases to reach to equilibrium and new equilibrium quantity and price will be derived.
View all questions of this test
Most Upvoted Answer
Direction: In the following questions, a statement of Assertion (A) i...
Assertion (A): Increase or decrease in demand causes a change in the price of the commodity. Equilibrium quantity remains constant.
Reason (R): When demand increases more than supply, equilibrium price will increase.
The correct answer is option 'C' - Assertion (A) is true, but Reason (R) is false.
Explanation:
Definition of Demand and Supply:
Demand refers to the quantity of a commodity that consumers are willing and able to purchase at a given price, while supply refers to the quantity of a commodity that producers are willing and able to offer for sale at a given price.
Relationship between Demand, Supply, and Price:
The price of a commodity is determined by the interaction of demand and supply in the market. When demand for a commodity increases or supply decreases, the price of the commodity tends to increase. Conversely, when demand decreases or supply increases, the price of the commodity tends to decrease.
Equilibrium:
In a perfectly competitive market, the equilibrium price and quantity are determined at the point where the demand and supply curves intersect. At this point, the quantity demanded by consumers equals the quantity supplied by producers, resulting in market equilibrium.
Understanding the Assertion and Reason:
The assertion states that an increase or decrease in demand causes a change in the price of the commodity, while the equilibrium quantity remains constant. This is true because an increase in demand leads to a higher equilibrium price and quantity, while a decrease in demand leads to a lower equilibrium price and quantity.
The reason states that when demand increases more than supply, the equilibrium price will increase. This is incorrect because when demand increases more than supply, the equilibrium price will actually decrease, not increase. This is because the increase in demand causes a shortage, leading to a higher price in order to balance the market.
Conclusion:
In summary, while the assertion is true and correctly explains the relationship between demand, supply, and price, the reason is false as it incorrectly states the impact of an increase in demand exceeding supply on the equilibrium price. Hence, option 'C' is the correct answer.
Reason (R): When demand increases more than supply, equilibrium price will increase.
The correct answer is option 'C' - Assertion (A) is true, but Reason (R) is false.
Explanation:
Definition of Demand and Supply:
Demand refers to the quantity of a commodity that consumers are willing and able to purchase at a given price, while supply refers to the quantity of a commodity that producers are willing and able to offer for sale at a given price.
Relationship between Demand, Supply, and Price:
The price of a commodity is determined by the interaction of demand and supply in the market. When demand for a commodity increases or supply decreases, the price of the commodity tends to increase. Conversely, when demand decreases or supply increases, the price of the commodity tends to decrease.
Equilibrium:
In a perfectly competitive market, the equilibrium price and quantity are determined at the point where the demand and supply curves intersect. At this point, the quantity demanded by consumers equals the quantity supplied by producers, resulting in market equilibrium.
Understanding the Assertion and Reason:
The assertion states that an increase or decrease in demand causes a change in the price of the commodity, while the equilibrium quantity remains constant. This is true because an increase in demand leads to a higher equilibrium price and quantity, while a decrease in demand leads to a lower equilibrium price and quantity.
The reason states that when demand increases more than supply, the equilibrium price will increase. This is incorrect because when demand increases more than supply, the equilibrium price will actually decrease, not increase. This is because the increase in demand causes a shortage, leading to a higher price in order to balance the market.
Conclusion:
In summary, while the assertion is true and correctly explains the relationship between demand, supply, and price, the reason is false as it incorrectly states the impact of an increase in demand exceeding supply on the equilibrium price. Hence, option 'C' is the correct answer.
Attention Commerce Students!
To make sure you are not studying endlessly, EduRev has designed Commerce study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Commerce.
|
Explore Courses for Commerce exam
|
|
Similar Commerce Doubts
Top Courses for CommerceView all
Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Increase or decrease in demand causes a change in the price of the commodity. Equilibrium quantity remains constant.Reason (R): When demand increases more than supply, equilibrium price will increase.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'C'. Can you explain this answer?
Question Description
Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Increase or decrease in demand causes a change in the price of the commodity. Equilibrium quantity remains constant.Reason (R): When demand increases more than supply, equilibrium price will increase.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'C'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Increase or decrease in demand causes a change in the price of the commodity. Equilibrium quantity remains constant.Reason (R): When demand increases more than supply, equilibrium price will increase.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Increase or decrease in demand causes a change in the price of the commodity. Equilibrium quantity remains constant.Reason (R): When demand increases more than supply, equilibrium price will increase.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'C'. Can you explain this answer?.
Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Increase or decrease in demand causes a change in the price of the commodity. Equilibrium quantity remains constant.Reason (R): When demand increases more than supply, equilibrium price will increase.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'C'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Increase or decrease in demand causes a change in the price of the commodity. Equilibrium quantity remains constant.Reason (R): When demand increases more than supply, equilibrium price will increase.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Increase or decrease in demand causes a change in the price of the commodity. Equilibrium quantity remains constant.Reason (R): When demand increases more than supply, equilibrium price will increase.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'C'. Can you explain this answer?.
Solutions for Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Increase or decrease in demand causes a change in the price of the commodity. Equilibrium quantity remains constant.Reason (R): When demand increases more than supply, equilibrium price will increase.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce.
Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.
Here you can find the meaning of Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Increase or decrease in demand causes a change in the price of the commodity. Equilibrium quantity remains constant.Reason (R): When demand increases more than supply, equilibrium price will increase.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'C'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Increase or decrease in demand causes a change in the price of the commodity. Equilibrium quantity remains constant.Reason (R): When demand increases more than supply, equilibrium price will increase.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'C'. Can you explain this answer?, a detailed solution for Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Increase or decrease in demand causes a change in the price of the commodity. Equilibrium quantity remains constant.Reason (R): When demand increases more than supply, equilibrium price will increase.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'C'. Can you explain this answer? has been provided alongside types of Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Increase or decrease in demand causes a change in the price of the commodity. Equilibrium quantity remains constant.Reason (R): When demand increases more than supply, equilibrium price will increase.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'C'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Increase or decrease in demand causes a change in the price of the commodity. Equilibrium quantity remains constant.Reason (R): When demand increases more than supply, equilibrium price will increase.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'C'. Can you explain this answer? tests, examples and also practice Commerce tests.
|
|
Explore Courses for Commerce exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up
within 7 days!
within 7 days!
Takes less than 10 seconds to signup