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Question
Fill in the blank with appropriate alternatives given below:
When the price of petrol goes up, demand of cars will ___________.
Options
rise
fall
not change
remain unchanged
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Solution
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.
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