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Question

In Economics when demand for a commodity increases with a fall in its price it is known as.

A
Contraction of demand
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B
Expansion of demand
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C
No change in demand
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D
None of the above
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Solution

The correct option is D Expansion of demand
When the demand increases as a result of price fall, this is known as Expansion of Demand . In other words, it states that rise in quantity demanded due to reduction in price of commodity, other factors remaining constant.

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