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Question
State with reason whether you agree or disagree with the following statement.
There is an inverse relationship between price and demand.
Solution
I agree with the given statement.
Reason:
- The law of demand states that, “Other factors remaining constant, when the price of a commodity rises, demand for it falls and when the price of a commodity falls, demand for it rises.”
- In the above diagram, Y-axis represents price and the X-axis represents quantity demanded. DD is the demand curve which slopes downward from left to right. It represents inverse relation between price and quantity demanded.
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