Question

Name at least three factors that can change (or shift) the demand (curve). Provide examples. Your answer should be at least six sentences long.

Answer 1

Ans:

when there is a change in demand due to change in price, there is movement along the demand curve. when there is a change in demand due to factors other than change in price, there is a shift of the demand curve.

Factors that shift the demand curve are as follows

a) when the price of the substitute is decreased, the demand curve will shift to the left and when the price of the substitute is increased, the demand curve will shift to the right.

b) when the price of the complement is decreased, the demand curve will shift to the right and when the price of the substitute is increased, the demand curve will shift to the left.

c) A decrease or increase in the income will effect the demand curve.for example a decrease in the income if the good is normal good will decrease the demand and demand curve will shift to the left.