Economics · Theory of Demand
Consider the following statements regarding the dynamics of consumer demand: Statement 1: Expansion of demand is characterized by a downward movement along an existing demand curve resulting specifically from a decrease in the price of the commodity. Statement 2: An increase in demand is represented by a rightward shift of the entire demand curve driven by non-price factors such as rising consumer income or changing preferences. Which of the following options is correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Statement 1 is false, but Statement 2 is true.
- 2Statement 1 is true, but Statement 2 is false.
- 3Both Statement 1 and Statement 2 are false.
- 4Both Statement 1 and Statement 2 are true.✓
Correct answer
Both Statement 1 and Statement 2 are true.
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