Question

Which of the following are true?

a) Extension and Co when price of one commodity falls, new consumers will buy commodity contraction of demand are related to change in price
b) Extension and Contraction of demand results in the movement along side the demand curve

• A. (a) is true, but (b) is false
• B. (a) is false, but (b) is true
• C. Both (a) and (b) are true
• D. Both (a) and (b) are false

Answer 1

The correct option is C Both (a) and (b) are true

a) Extension of demand occurs when price of one commodity falls, new consumers will buy commodity - this statement is true as extension of demand refers to a situation when other things remaining, price falls.
b) Extension and Contraction of demand results in the movement along side the demand curve: This statement is also true as extension and contraction of demand is observed when the price of the commodity changes, other things remaining constant.