The downward movement along the demand curve of a commodity is due to:...
Explanation:
Introduction:
The downward movement along the demand curve of a commodity refers to a decrease in the quantity demanded of the commodity at each price level. It represents a shift from one point on the demand curve to another, where the quantity demanded decreases.
Decrease in the price of the commodity demanded:
The correct answer to the given question is option 'D', which states that a decrease in the price of the commodity demanded leads to a downward movement along the demand curve. This is because a decrease in the price of a commodity makes it more affordable and attractive to consumers, leading to an increase in the quantity demanded. As a result, consumers are willing to buy more of the commodity at lower prices, causing a downward movement along the demand curve.
Explanation:
When the price of a commodity decreases, it creates an incentive for consumers to purchase more of that commodity. This is because the lower price makes the commodity relatively cheaper compared to other goods and services in the market. As a result, consumers may choose to substitute other goods with this cheaper commodity.
Substitution effect:
A decrease in the price of a commodity also affects the demand for its substitutes. If the price of a substitute commodity remains constant, the decrease in the price of the original commodity makes it a more attractive option for consumers. This leads to a decrease in the demand for the substitute and an increase in the demand for the original commodity. Consequently, there is a downward movement along the demand curve for the original commodity.
Income effect:
A decrease in the price of a commodity may also have an income effect on consumers. If the price decrease leads to increased purchasing power for consumers, they may choose to buy more of the commodity, resulting in a downward movement along the demand curve.
Conclusion:
In summary, the downward movement along the demand curve of a commodity is primarily caused by a decrease in the price of the commodity demanded. This decrease in price makes the commodity more affordable and attractive to consumers, leading to an increase in the quantity demanded and a subsequent downward movement along the demand curve.
The downward movement along the demand curve of a commodity is due to:...
Downward Movement of Demand Curve - When the price of the commodity falls, the quantity demanded rises. It leads to the downward movement of the demand curve. It is also known as expansion of demand.
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