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    Question

    Which of the following is/are the causes of demand

    curves moving downwards to the right?
    A Law of diminishing marginal utility Correct Answer Incorrect Answer
    B Income effect Correct Answer Incorrect Answer
    C Veblen effect Correct Answer Incorrect Answer
    D Both 'A' and 'B' Correct Answer Incorrect Answer

    Solution

    When the quantity of goods is more, the marginal utility of the commodity is less. Thus, the consumer is not willing to pay more price for the commodity and its demand will decline. Also, when the price of the commodity is low, its demand increases. The income effect identifies the change in consumers' demand for goods and services based on their incomes.

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