A fall in demand or rise in supply of a commodity

Q. A fall in demand or rise in supply of a commodity

A. increase the price of that commodity
B. decrease the price of that commodity
C. neutralizes the changes in the price
D. determines the price elasticity

Answer: B. decrease the price of that commodity

The amount of a good in the market is the supply, and the amount people want to buy is the demand.

Consider a certain commodity, such as coal. If there is a strong demand for coal, but there is less coal, then the price goes up.

If conditions change and demand for coal falls, for instance, consumers switch to petroleum for fuel, or the supply of the commodity rises, for instance, a new coal block is discovered, then the price of the commodity decreases.

Learn more: https://en.wikibooks.org/wiki/Microeconomics/Supply_and_Demand

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