Question

Please answer this ASAP: Demand is the relationship between price and the quantity demanded. Which of the following statements are true:

A price change results in movement along the demand curve.

A change in the number of consumers can shift the market demand curve left or right.

A change in the price of a substitute will result in a change in the quantity demanded of the good in question, in the opposite direction of the price change.

All of the above statements are true.

Two of the above statements are true.

Answer 1

In the given question, we can say that only two of the given statements are correct.

When there is a change in price, there is a movement along the demand curve and when demand changes due to some other reason , there is a shift in the demand curve. This statement is correct.

When there is a change in the number of consumers, the market demand curve can shift left or right. If the number of consumers increases, the demand increases and therefore the market demand curve shifts to the right and when the number of consumers decreases, the demand decreases and therefore the market demand curve shifts left. This statement is correct.

A change in the price of a substitute will result in a change in the quantity demanded of the good in question, but in the same direction of the price change. As the price of the substitute good increases, people will look to avoid the substitute good and would prefer to have the good in question, this will therefore increase the demand of the good in question. If there is a decrease in the price of the substitute good, people will look to buy the substitute good and avoid buying the good in the question, this will decrease the demand of the good in question. So, we can say that the price of the good and the demand of the substitute good move in the same direction. So this statement is false.