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Expansion & contraction of Demand curve occurs due to
- a)Change in the price of commodity
- b)Change in price of substitute or complementary goods
- c)Change in income
- d)None
Correct answer is option 'A'. Can you explain this answer?
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Verified Answer
Expansion & contraction of Demand curve occurs due toa)Change in t...
When as a result of decrease in price, the quantity demanded increases, in economics we say that there is an expansion of demand and when as a result of increase in price, quantity demanded decreases we say that there is a contraction of demand. Hence, we can conclude that expansion contraction of demand curve occurs due to change in price of a commodity.
Most Upvoted Answer
Expansion & contraction of Demand curve occurs due toa)Change in t...
Change in Price of Commodity
The primary reason for the expansion and contraction of the demand curve is a change in the price of the commodity itself. When the price of a product decreases, consumers are more willing to buy it at a lower cost, leading to an expansion of the demand curve. Conversely, if the price increases, consumers may be less inclined to purchase the product, causing a contraction of the demand curve.
This change in price directly affects the quantity demanded at each price point, resulting in a shift along the demand curve. It is essential for businesses to understand how changes in price impact consumer behavior and adjust their pricing strategies accordingly to maximize sales and revenue.
In conclusion, changes in the price of a commodity play a crucial role in determining the expansion and contraction of the demand curve. Businesses must closely monitor these price fluctuations and adapt their marketing and pricing strategies to meet consumer demand effectively.
The primary reason for the expansion and contraction of the demand curve is a change in the price of the commodity itself. When the price of a product decreases, consumers are more willing to buy it at a lower cost, leading to an expansion of the demand curve. Conversely, if the price increases, consumers may be less inclined to purchase the product, causing a contraction of the demand curve.
This change in price directly affects the quantity demanded at each price point, resulting in a shift along the demand curve. It is essential for businesses to understand how changes in price impact consumer behavior and adjust their pricing strategies accordingly to maximize sales and revenue.
In conclusion, changes in the price of a commodity play a crucial role in determining the expansion and contraction of the demand curve. Businesses must closely monitor these price fluctuations and adapt their marketing and pricing strategies to meet consumer demand effectively.
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Community Answer
Expansion & contraction of Demand curve occurs due toa)Change in t...
An expansion or contraction of demand occurs as a result of the income effect or substitution effect. When the price of a commodity falls, an individual can get the same level of satisfaction for less expenditure, provided it's a normal good. In this case, the consumer can purchase more of the goods on a given budget.
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Expansion & contraction of Demand curve occurs due toa)Change in the price of commodityb)Change in price of substitute or complementary goodsc)Change in incomed)NoneCorrect answer is option 'A'. Can you explain this answer?
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