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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.
In which of the following cases there will be leftward shift in demand?
Options
Increase in the price of substitute goods.
Rise in the price of complementary goods.
Fall in the price of complementary goods
Decrease in the income of the consumer in case of inferior goods.
Solution
Rise in the price of complementary goods.
Explanation:
Because consumers are purchasing fewer products for the same price, a leftward shift in the demand curve implies a decline in demand. As a result, as the costs of complementary commodities rise, demand falls.
