due to rise in prices of mango sheetal demanded only three dozen mangoes insted of five dozen . explain the concept and give the illustration
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Answer:
Identify concept : Contraction in demand
Explanation:
Other factor remaining constant, a fall in demand due a rise in price is called contraction in demand.
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The price of the commodity and its quantity demanded is negatively related therefore, Sheetal demanded less of the mango as its price increases.
The price of the commodity and its quantity demanded is negatively related therefore, Sheetal demanded less of the mango as its price increases.Explanation:
- With the increase in the price, the purchasing power of and individual decreases and therefore, the capacity of and individual to buy or consume the commodity also decreases. Which in turns reduces the quantity demanded of that commodity.
- For example, lets assume that Ram have 120 rupees and the price of a shoe is Rs. 10/- per pair. In this case he can purchase 12 pair of the shoe.
- Now if the price of the pair of the shoe increases to 12 from 10 then Ram can only purchase 10 pair of shoes.
- Therefore quantity demanded declined with increase in the price.
To know more about demand and supply refer the link below:
brainly.in/question/7196752
brainly.in/question/28558616
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