Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Theory of Consumer behaviour

Question:

Law of demand states that there is a negative relation between the price and the quantity demanded of the commodity. According to you, which of the following option violates the law of demand?

Options:

Substitute goods

Complementary goods

Dipsomaniac 

All of the above

Correct Answer:

Dipsomaniac 

Explanation:

Dipsomaniac is a person who has an uncontrollable craving for alcoholic liquors. The law does not seem to be applicable to a drunkard, as his utility increases with increase in the consumption.

Regarding options 1 and 2, neither substitute goods nor complementary goods violate the law of demand.

In the case of substitute goods, if the price of one good increases, the demand for the substitute good may increase. However, this does not violate the law of demand, as there is still an inverse relationship between the price of the substitute good and its quantity demanded.

Similarly, in the case of complementary goods, if the price of one good increases, the demand for its complementary good may decrease. Again, this does not violate the law of demand, as there is still an inverse relationship between the price of the complementary good and its quantity demanded.