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WAEC Economics 2001 Question 16

Question 16

Theory of Demand

Consumers buy more of a commodity at a lower price than at a higher price because

  1. A.producers like to produce more.
  2. B.in any given situation, people like to buy more.
  3. C.consumers like to show off.
  4. D.with the same amount of money, they will be able to buy more
Show the answer and explanation

Answer: D (with the same amount of money, they will be able to buy more)

Explanation

A lower price raises the purchasing power of the same income (income effect), so more can be bought.