Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Market Equilibrium

Question:

A shift in demand curve towards the origin with given supply curve causes:

Options:

Quantity to decrease, price to fall

Quantity to decrease, price to increase

Quantity to increase, price to fall

Quantity to increase, price to increase

Correct Answer:

Quantity to decrease, price to fall

Explanation:

The correct answer is option 1: Quantity to decrease, price to fall

A shift in the demand curve towards the origin means that demand is decreasing while the supply curve remains unchanged.

  • When demand decreases, at every price level, consumers are willing to buy less than before.
  • This leads to a new equilibrium where both the equilibrium price falls and the equilibrium quantity decreases because sellers must lower prices to encourage more sales.