[amp_mcq option1=”Rises” option2=”Falls” option3=”Remains unchanged” option4=”Any of the above” correct=”option1″]
The correct answer is: A. Rises
When the price of a substitute of X commodity falls, the demand for X will rise. This is because consumers will now be able to purchase the substitute at a lower price, which will make it more attractive to them. As a result, they will demand more of X.
Here is a brief explanation of each option:
- A. Rises. When the price of a substitute of X commodity falls, the demand for X will rise. This is because consumers will now be able to purchase the substitute at a lower price, which will make it more attractive to them. As a result, they will demand more of X.
- B. Falls. This is not the correct answer because the demand for X will rise when the price of a substitute of X commodity falls.
- C. Remains unchanged. This is also not the correct answer because the demand for X will rise when the price of a substitute of X commodity falls.
- D. Any of the above. This is not the correct answer because the demand for X will rise when the price of a substitute of X commodity falls.