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?
As a result of rise in consumer's income, the demand curve for coarse-grain (inferior good) will:
Differentiate between extension and contraction of demand.
Give two reasons for the shift of the demand curve towards the left.
In order to encourage tourism in Goa, Government of India suggests Indian Airlines to reduce air fares to Goa from four major cities: Chennai, Kolkata, Mumbai and New Delhi. If the Indian Airlines reduces the air fare to Goa, how will this affect the market demand curve for air travel to Goa?
What is meant by an increase in demand?
What causes an upward movement along a demand curve?
What does a rightward shift of demand curve indicate?
With the help of a suitable diagram, explain expansion in demand.
State whether the following statement is true or false. Give reasons.
Contraction of demand is the result of a decrease in the number of consumers.
