McqMate
| Q. |
Extension or contraction of quantity demanded of a commodity is a result of a change in the - |
| A. | unit price of the commodity |
| B. | income of the consutner |
| C. | tastes of the consumer |
| D. | climate of the region |
| Answer» A. unit price of the commodity | |
|
Explanation: Demand for a commodity refers to the quantity of the commodity that people are willing to purchase at a specific price per unit of time, other factors (such as price of related goods, income, tastes and preferences, advertising, etc) being constant. Demand includes the desire to buy the commodity accompanied by the willingness to buy it and sufficient purchasing power to purchase it. So changes in the unit price of a commodity leads to either extension or contraction in demand. The law of demand states that there is an inverse relationship between quantity demanded of a commodity and its price, other factors being constant. In other words, higher the price, lower the demand and vice versa, other things remaining constant. |
|
View all MCQs in
Economics (GK)No comments yet