Question

In the following Question, read the following statement: Assertion (A) and Reason (R). Choose the correct alternative among those given below:

Assertion (A): Market demand curve is flatter than individual demand curves. 

Reason (R): Market demand curve is obtained by horizontal summation of individual demand curves.

Options

• Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A).

• Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).

• Assertion (A) is True but Reason (R) is False.

• Assertion (A) is False but Reason (R) is True.

Answer 1

Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).

Explanation:

Both statements are true. Horizontal summation gives the market demand curve, but its flatter shape is attributed to the greater proportionate change in market demand as price changes.