Assertion Reasoning Analysis: Demand and Price

This section analyzes the given Assertion (A) and Reasoning (R) regarding commodity demand and price changes.

Analysis of Assertion (A)

Assertion (A): Price reduction normally leads to an increase in the demand for a commodity.

• This statement is correct. It reflects the basic principle of the Law of Demand in microeconomics.
• The law states that, other factors remaining constant, a lower price typically leads to a higher quantity demanded.

Analysis of Reasoning (R)

Reasoning (R): Price reduction leads to the entry of new buyers of the commodity in the market.

• This statement is also correct.
• A lower price makes the commodity affordable or attractive to consumers who previously did not purchase it, thereby increasing the total number of buyers in the market.

Relationship Between Assertion (A) and Reasoning (R)

Both statements (A) and (R) are factually correct, but (R) does not fully explain (A).

• Reasoning (R) highlights one reason for the increased demand (new buyers).
• However, the increase in quantity demanded when price falls also includes the effect on existing buyers, who may choose to consume more of the product at the lower price (extension of demand).
• Since Reasoning (R) only accounts for one part of the reason for the increase in demand, it is not the full explanation for Assertion (A).

Conclusion

Both the assertion and the reasoning are correct statements. However, the reasoning provided is only a partial explanation for the assertion.

Therefore, the correct code is: Both (A) and (R) are correct but (R) does not offer full explanation of (A).