I. CHOOSETHE CORRECT ANSWER:
1. There exists an indirectrelationship between price and demand
2. Law of demand is only applicable tovery low priced goods
3. One of the determinants of demandis taste and preference.
II. WRITESHORT NOTE ON :
1. Alfredmarshal’s law of demand:
The greater the amount to be sold thesmaller must be the price at which it is offered.
In other words, the amount demandedincreases with a fall in price and diminishes with a rise in price.
2. Law ofsupply:
As the price of the commodity rises,the quantity supplied is extended and as the price of the
commodity falls the quantity suppliedis contracted. This is called the law of supply.
3. Listout the determinants of supply:
- Thedeterminants of supply are
- Productiontechnology
- Prices offactors
- Prices ofother products
- Number ofproducers
- Futureprice expectation
- Taxes andsubsidies
- Noneconomic factors like natural calamities, war, epidemics etc.
III. WRITEIN A PARAGRAPH:
1. With the help of table explain.
The following demand schedule showsthe inverse or indirect relationship between price and demand.
| PRICE (in Rs. ) | DEMAND (in kg.) |
| 25 | 01 |
| 20 | 02 |
| 15 | 03 |
| 10 | 04 |
| 5 | 05 |
The above demand schedule shows thedifferent quantities demanded at different prices by an individual consumer.
When the price of the mangoes is Rs.25 per kg the consumer demands 1 kg.
When the price falls from Rs. 25 toRs. 20, Rs. 15, Rs. 10 and Rs. 5, the consumer increases his demand from 1 to2, 3, 4 and 5 kgs respectively.
This shows that with a fall in pricethe demand increases.
It indicates the indirect relationshipbetween price and demand.