Question

4. Explain why a demand curve slopes downward. 5.   In each of the following examples, name...

4. Explain why a demand curve slopes downward.

5.   In each of the following examples, name the factor that affects demand and describe its impact on your demand for a new cell phone.    

a. You hear a rumor that a new and improved model of the phone you want is coming out next year.    

b. Your grandparents give you $500.    

c. A cellular network announces a holiday sale on a text-messaging package that includes the purchase of a new phone.    

d. A friend tells you how great his new cell phone is and suggests that you get one, too.

Homework Answers

Answer #1

4)

Following are reasons for the downward sloping demand curve:

  • When the price falls, the real income of consumers rises, so there will be a rise in demand for the good.
  • When the price falls, the substitution effect makes the good relatively cheaper, hence, the demand for good rises.
  • Alternative uses: at the lower price, goods can be used for many purposes, thus demand increases.

5)

a)

The consumer will postpone the demand for the future, thus the present demand for goodwill decline.

b)

After receiving money from grandparents, income rises, so the demand curve will shift right thereby increasing demand.

c)

Demand for cell phone will rise since new benefits are associated with newly purchased phones.

d)

Now new suggestion will incentivise us to purchase new phone, thus demand for cell phone will rise or demand curve will shift to right

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT
Active Questions
  • Summative evaluations frequently include __________________ A) Time to mastery. B) Cost of program development. C) Functionality...
    asked 7 minutes ago
  • Child abuse occurs in that type of family environments? A) step families B) low income families...
    asked 39 minutes ago
  • A disk with a c value of 1/2, a mass of 4 kg, and radius of...
    asked 41 minutes ago
  • 1. Modern couples in the United States are having fewer children. a. True b. False 2.According...
    asked 52 minutes ago
  • Assume the following information regarding U.S. and European annualized interest rates: Currency                          &n
    asked 1 hour ago
  • What is the basis of reliability for the following: 1)Dying declaration 2) business records 3)excited utterness...
    asked 1 hour ago
  • P6-9 (L02,4) (Analysis of Business Problems) James Kirk is a financial executive with McDowell Enterprises. Although...
    asked 1 hour ago
  • Written story about someone who engages in primary deviance and then becomes a secondary deviant. Make...
    asked 1 hour ago
  • If you have an elastic sample that you want to analyze by TEMI Which sample preparation...
    asked 1 hour ago
  • Philosophy: Compare and contrast Plato’s notion of form to that of Aristotle’s. How do their respective...
    asked 1 hour ago
  • Metal Oxide Varistors MOV's are non-ohmic variable resistors used in surge protectors to stunt away excessive...
    asked 2 hours ago
  • GreenTree Financing lent an engineering company $100,000 to retrofit an environmentally unfriendly building. The loan is...
    asked 2 hours ago