CA Foundation P4 · Chapter 2 · Question 1 of 15
The law of demand states that, other things remaining constant:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Quantity demanded of a good varies inversely with its price
Explanation
The law of demand describes an inverse relationship between price and quantity demanded, ceteris paribus. The effect of income is a separate determinant that shifts the demand curve and is not the subject of the law.
More Theory of Demand and Supply MCQs
- Q3For a normal good, an increase in consumers' income will cause:
- Q4The price of a product rises from Rs. 20 to Rs. 25 and quantity demanded falls from 400 units to 300 units. Using the percentage…
- Q5When the price of a good rises from Rs. 10 to Rs. 12, quantity demanded falls from 150 units to 100 units. Using the arc (midpoint)…
- Q6When the price of a good falls, total expenditure on it remains unchanged. According to the total outlay method, demand is:
- Q7A household's income rises from Rs. 20,000 to Rs. 25,000 per month and its consumption of coarse grain falls from 50 kg to 45 kg. The…