Examveda
Examveda

Contraction of demand is the result of

A. Decrease in the number of consumers

B. Increase in the price of the commodity concerned

C. Increase in the prices of other goods

D. Decrease in the income of purchasers

Answer: Option B

Solution(By Examveda Team)

Contraction of demand is the result of Increase in the price of the commodity concerned. The demand for a commodity changes due to a change in price. It is called extension and contraction of demand. When there is decrease in price of commodity there is in increase in demand of that commodity.

This Question Belongs to Commerce >> Economics

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Related Questions on Economics

Which among the following statement is INCORRECT?

A. On a linear demand curve, all the five forms of elasticity can be depicted

B. If two demand curves are linear and intersecting each other, then, coefficient of elasticity would be same on different demand curves at the point of intersection.

C. If two demand curves are linear and parallel to each other, then, at a particular price, the coefficient of elasticity would be different on different demand curves.

D. The price elasticity of demand is expressed in terms of relaive not absolute changes in Price and Quantity demanded.