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Complete the following hypothetical
demand schedule
Price of commodity Yoon Demanded
350
300
250
10
200
150
le of
For
30
Answers
Answer:
1. When price of commodity rises, the demand for it contracts.
Explanation:
When the price of a commodity increases, other things are kept constant, the demand for the commodity falls/contracts and vice versa.
2. When less is purchased at the constant price, it is called decrease in demand.
Explanation:
Decrease in demand is a condition when the demand for good decreases due to a change in factor other than the price of the commodity. Accordingly, less is purchased even when the price is constant. Some of the factor causing decrease in demand are decrease in income, moving of taste and preferences away from the commodity and rise in prices of other goods.
3. When the price of petrol goes up, demand of cars will fall.
Explanation:
Cars and petrol are complementary goods, i.e., goods that are demanded together. In such cases, a rise in the price of one leads to a fall in the demand for the other good. Thus, a rise in the price of petrol will lead to a fall in the demand for cars.
4. Market demand is an aggregate of purchasing by all buyers.
Explanation:
Market demand is the aggregate (total) of the individual demands for a product by all consumers in the market at different prices.
5. Indirect demand is also known as derived demand.
Explanation:
When goods are demanded so that they can be used in the production of some other commodity, it is called indirect or derived demand. In other words, such demand is derived as a result of the demand/consumption of some other commodity. Cement, for example, has indirect/derived demand as a result of demand for construction of buildings.
Explanation: