Question

A fall in the price of a commodity leads to ______.

• A. a shift in demand
• B. a rise in consumer's real income
• C. a fall in demand
• D. none of the above

Answer 1

Answer: (B)

a rise in consumer's real income

The fall in the price of a commodity is equivalent to an increase in the income of the consumer because now he has to spend less for purchasing the same quantity as before.

Hence, the correct option is B.