Explain the effect of : (a) change in own price and (b) chane in price of substitude on demand of a good.

Explain the effect of : (a) change in own price and (b) chane in price

1.	Explain the effect of : (a) change in own price and (b) chane in price of substitude on demand of a good.
Answer» <html><body><p></p>Solution :(a) A change in own price of the commodity will lead to change in qunatity <a href="https://interviewquestions.tuteehub.com/tag/demanded-7675308" style="font-weight:bold;" target="_blank" title="Click to know more about DEMANDED">DEMANDED</a> or in other <a href="https://interviewquestions.tuteehub.com/tag/words-25841" style="font-weight:bold;" target="_blank" title="Click to know more about WORDS">WORDS</a>, expansion or contraction demand. It leads to movement <a href="https://interviewquestions.tuteehub.com/tag/along-1974109" style="font-weight:bold;" target="_blank" title="Click to know more about ALONG">ALONG</a> the demand curve. <br/>(b) Price of substitue goods and qunatity demanded of another subsitute has a positive relationship. <a href="https://interviewquestions.tuteehub.com/tag/hence-484344" style="font-weight:bold;" target="_blank" title="Click to know more about HENCE">HENCE</a>, an <a href="https://interviewquestions.tuteehub.com/tag/increase-1040383" style="font-weight:bold;" target="_blank" title="Click to know more about INCREASE">INCREASE</a> in price of the substitute good will lead to an increase in demand of the concerned good and vice-versa. It leads to a shift in the demand curve.</body></html>