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WAEC Economics 2020 Question 6

Question 6

Theory of Demand

Figure 2 shows change in demand for commodity X which is a normal good. Which of the following caused the change in demand from D1D1 to D2D2?

Diagram for this question
  1. A.Fall in the income of consumers
  2. B.Rise in the price of a substitute
  3. C.Rise in the price of a complement
  4. D.Fall in the supply of commodity X
Show the answer and explanation

Answer: B (Rise in the price of a substitute)

Explanation

Demand shifted right; a dearer substitute makes people buy more X.