[amp_mcq option1=”a-2, b-1, c-3″ option2=”a-2, b-3, c-1″ option3=”a-1, b-2, c-3″ option4=”a-3, b-2, c-1″ correct=”option1″]
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.