‘As the price of a good falls, the resulting increased purchasing power may be a reason for increase in quantity demanded’. Do you agree with the given statement? Give reason for your answer.
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Yes, as the purchasing power of people increases with the price reduced, the demand for the specific product will enhance.
Demand is the willingness of a person to purchase a certain product and their ability to purchase it at a certain price.
As prices go down and people have more power or ability to purchase the product, their willingness shifts to an upward curve and hence this increased their demand.
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