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Question
In the following Question, read the statements and choose the correct alternative among those given below:
Statement 1: Slope of demand curve is based on the percentage change in price and quantity.
Statement 2: Due to inverse relationship between price and demand, the demand curve slopes downwards.
Options
Both the Statements are true.
Both the Statements are false.
Statement 1 is true and Statement 2 is false.
Statement 2 is true and Statement 1 is false.
MCQ
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Solution
Statement 2 is true and Statement 1 is false.
Explanation:
the slope is based on absolute changes in price and quantity, not percentage changes. Statement 2 is true: the inverse relationship between price and quantity demanded makes the demand curve slope downward.
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