Suppose the number of consumers in the market for clothes increases, other things remaining unchanged and the number of firms fixed. Which of the following is NOT correct?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → The supply curve of clothes shifts to the right.
More consumers means more is demanded at each price, so the demand curve shifts right. The supply curve depends on the firms, so it does not move.
Option (1) At each price, more clothes are demanded than before. — True. With more buyers, more clothes are demanded at every price.
Option (2) The supply curve of clothes shifts to the right. — False. The number of consumers does not affect supply. Supply shifts only with changes on the firms’ side, such as their cost, technology or number.
Option (3) The equilibrium price of clothes rises. — True. At the old price there is excess demand, so the price rises.
Option (4) The quantity of clothes bought and sold rises. — True. At the new equilibrium more clothes are bought and sold.
NCERT (2026-27): “Demand Shift … Now let us turn to another example. Suppose due to some reason, there is increase in the number of consumers in the market for clothes. As the number of consumers increases, other factors remaining unchanged, at each price, more clothes will be demanded. Thus, the demand curve will shift rightwards. But this increase in the number of consumers does not have any impact on the supply curve since the supply curve may shift only due to changes in the parameters relating to firms’ behaviour or with an increase in the number of firms, as stated in Chapter 4. This case again can be illustrated through Figure 5.2(a) in which the demand curve DD0 shifts rightward to DD2, the supply curve remaining unchanged at SS0. The figure clearly shows that compared to the old equilibrium point E, at point G which is the new equilibrium point, there is an increase in both price and quantity demanded and supplied.” |