Question

Which of the following will result in a decrease in demand?

[1 mark]

• A. An increase in income, if the goods are normal
• B. A decrease in the price of a complement to the goods
• C. An increase in the price of a substitute for the goods
• D. None of the above

Answer 1

The correct option is D None of the above

Decrease in demand may occur due to the following reasons:
(i) A product has gone out of fashion or the tastes of the people for a commodity have declined.
(ii) Incomes of the consumers have fallen.
(iii) The prices of the substitutes of the commodity have fallen.
(iv) The prices of the complements of that commodity have risen.