(Advanced analysis) Answer the question on the basis of the following information.The demand for commodity X is represented by the equation P = 10 - 0.2Q and supply by the equation P = 2 + 0.2Q. Refer to the given information.If demand changed from P = 10 - .2Q to P = 7 - .3Q,we can conclude that:

A) demand has increased.
B) demand has decreased.
C) supply will increase.
D) supply will decrease.

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Samin Choudhury · Accepted Answer

Final Answer : B, Explanation :  When demand changes from P = 10 - 0.2Q to P = 7 - 0.3Q, it means that for every unit increase in quantity demanded (Q), price (P) will decrease by 0.3 instead of 0.2. This implies that the demand curve has shifted downward (to the right) indicating a decrease in demand. The supply curve remains unchanged, so options C and D are not valid choices.

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