[amp_mcq option1=”Price of the commodity should not change” option2=”Quantity demanded should not change” option3=”Prices of substitutes should not change” option4=”Demand curve must be linear” correct=”option3″]<\/p>\n
The correct answer is: C. Prices of substitutes should not change<\/strong><\/p>\n The law of demand states that, all other things being equal, the quantity demanded of a good or service will decrease as the price of that good or service increases.<\/p>\n The assumption that prices of substitutes should not change is necessary for the law of demand to hold true. This is because if the prices of substitutes change, it will affect the demand for the good or service in question. For example, if the price of coffee increases, people may be more likely to drink tea instead. This would lead to a decrease in the demand for coffee.<\/p>\n The other options are not assumptions of the law of demand. Option A, price of the commodity should not change, is not an assumption because the law of demand states that the quantity demanded will decrease as the price increases. Option B, quantity demanded should not change, is not an assumption because the law of demand states that the quantity demanded will change as the price changes. Option D, demand curve must be linear, is not an assumption because the law of demand does not specify the shape of the demand curve.<\/p>\n","protected":false},"excerpt":{"rendered":" [amp_mcq option1=”Price of the commodity should not change” option2=”Quantity demanded should not change” option3=”Prices of substitutes should not change” option4=”Demand curve must be linear” correct=”option3″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-53468","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"\n