CA Foundation · Business Economics · Theory of Demand and Supply
Which of the following will cause a movement along the demand curve for petrol, rather than a shift of the curve, other factors remaining unchanged?
A fall in the price of petrol itself causes a movement along the demand curve, called an extension of demand. Changes in income, the price of related goods or tastes are non-price determinants and shift the whole demand curve instead.
- AA rise in consumers' incomes
- BA fall in the price of electric scooters
- CA fall in the price of petrol itselfCorrect
- DA change in consumers' preference towards public transport
Explanation
A change in the commodity's own price causes an expansion or contraction of demand, which is a movement along the same curve. Changes in income, prices of substitutes like electric scooters and tastes change the demand conditions and shift the curve.
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