Please give me correct answer with reason:
Which among the following is incorrect
The realtive decrease in prices of fruits causes
(a) Deamand of fruits to increase
(b) Demand of sweets to increase
(c) No change in demand for potatoes
(d) The demand for substitutes goods to fruits would decrease
Dear Dimple,
the ans is NO CHANGE IN DEMAND FOR POTATOES.
the reason is....say i have Rs. 10 with me and till now i was buying potato of Rs.5 and fruit of Rs. 5. though i required potatoes of Rs. 6 and fruit of Rs. 5, due to less funds at my disposal, i had to settle down with potatoes of Rs.5 only.
now, say fruit prace falls to rs. 4. now, my capacity to buy potato is Rs. 6....thus the demand for potatoes also increases..
- Ankit
| Originally posted by : Ankit | ||
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Dear Dimple, the ans is NO CHANGE IN DEMAND FOR POTATOES. the reason is....say i have Rs. 10 with me and till now i was buying potato of Rs.5 and fruit of Rs. 5. though i required potatoes of Rs. 6 and fruit of Rs. 5, due to less funds at my disposal, i had to settle down with potatoes of Rs.5 only. now, say fruit prace falls to rs. 4. now, my capacity to buy potato is Rs. 6....thus the demand for potatoes also increases.. - Ankit |
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I thought it was option (b), plz tell me why it is not option (b). How are fruits and sweets related?
No Dimple...that may not be the correct answer...
this may be so, because there are many sweets which have a particular fruit as an ingredient.say for example a mango barfi...
now, if the price of mango goes down, the cost of production of a mango barfi will automatically go down and thus the price of the mango barfi will move down...
thus, the lower price of the barfi will cause the demand to go up...
- Ankit
I had few more doubts, can I ask if I am not bothering you?
Sure...why not...but send me a Pvt Msg naa..if possible..plss
CAclubindia
