Which of these causes a decrease in demand rather than a contraction?

A rise in the good's own priceCorrect answerYour answerA fall in the price of a substituteCorrect answerYour answerA rise in the good's own price by 10%Correct answerYour answerAny change in the good's own priceCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer B

Correct answer: B

A decrease in demand is a leftward shift caused by a factor other than own price.
A cheaper substitute is such a factor; own-price changes cause contractions or extensions.

Concept: Decrease versus contraction
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsMovement along and shift of the curve

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Which of these causes a decrease in demand rather than a contraction?

Explanation