Question

Which of the given options for a reason of decrease in demand (leftward shift of the demand curve)

Options

• rise in the own price

• increase in the price of substitute goods

• increase in the price of complementary goods

• increase in income

Answer 1

Increase in the price of complementary goods

Explanation:

When the price of complementary goods (goods used together, like tea and sugar or petrol and cars) increases, the demand for the related good decreases. This causes a leftward shift in the demand curve indicating a decrease in demand.