Question

Study the following diagram and answer the questions:

Questions:

1. In which direction does the demand curve slope?
2. What is the reason for the fall in demand of rice from Q₀ to Q₁?

Answer 1

1. The demand curve slopes downwards from left to right.
2. The increase in rice prices from P₀ to P₁ is the cause of the decline in rice demand from Q₀ to Q₁.