Advertisements
Advertisements
Question
If Coke and Fanta are close substitutes to each other, a rise in price of Coke will lead to ______ for Fanta.
Options
Decrease in demand.
Increase in demand.
Increase in quantity supplied.
No change in demand.
Advertisements
Solution
If Coke and Fanta are close substitutes to each other, a rise in price of Coke will lead to Increase in demand for Fanta.
Explanation: Since Fanta and Coke are close choices, any increase in Coke's price will result in a rise in Fanta's demand. This is a result of customers switching from coke to Fanta in terms of demand as the price of coke increases.
APPEARS IN
RELATED QUESTIONS
What is meant by an increase in demand?
What does an upward movement along the same demand curve indicate?
What is an expansion of demand?
Define decrease in demand.
Explain the following diagram:
Define contraction of demand (or decrease in quantity demanded).
What causes a downward movement along a demand curve?
With the help of a suitable diagram, explain expansion in demand.
Explain the following diagram.
State whether the following statement is true or false. Give reasons.
A change in quantity demanded as a result of price change will imply a shift of the demand curve to the right.
