Match the following. List-I List-II a. Decrease in own price 1. Contraction in demand b. Unfavourable change in taste 2. Extension in demand c. Increase in own price 3. Decrease in demand

The correct answer is: A. a-2, b-1, c-3

• A decrease in own price will lead to an extension in demand, as consumers will be able to purchase more of the good at a lower price.
• An unfavorable change in taste will lead to a contraction in demand, as consumers will be less willing to purchase the good.
• An increase in own price will lead to a decrease in demand, as consumers will be able to purchase less of the good at a higher price.

Here is a diagram that illustrates the effect of a decrease in own price on demand:

[Diagram of a demand curve shifting to the right]

As you can see, the demand curve shifts to the right, indicating that consumers are willing to purchase more of the good at a lower price.

Here is a diagram that illustrates the effect of an unfavorable change in taste on demand:

[Diagram of a demand curve shifting to the left]

As you can see, the demand curve shifts to the left, indicating that consumers are less willing to purchase the good.

Here is a diagram that illustrates the effect of an increase in own price on demand:

[Diagram of a demand curve shifting down]

As you can see, the demand curve shifts down, indicating that consumers are willing to purchase less of the good at a higher price.