Question

Read the following news report and answer the Q.97-Q.100 on the basis of the same:

The quantity of a commodity that a consumer is willing to buy and is able to afford, given the prices of goods and the consumer's tastes and preferences is called demand for the commodity. Whenever one or more of these variables change, the quantity of the good Chosen by the consumer is likely to change as well. The relation between the consumer's optimal choice of the quantity of a good and its price is very important and this relation is called the demand function. Thus, the consumer's demand function for a good gives the amount of the good that the consumer chooses at different levels of its price when the other things remain unchanged.

Assertion: The income of the consumers remains unchanged

Reason: Commodity should be a normal good.

Select the correct alternative from the following.

Options

• Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).

• Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).

• Assertion (A) is true, but Reason (R) is false

• Assertion (A) is false, but Reason (R) is true

Answer 1

Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).

Explanation:

The consumer's income remains unchanged. This is one of the assumptions that must be true in order for the law of demand to work. The Law of Demand is based on the idea that the commodity is a standard product. As a result, while the reason is the right statement, the claim is incorrect.