Why Choose Us?
0% AI Guarantee
Human-written only.
24/7 Support
Anytime, anywhere.
Plagiarism Free
100% Original.
Expert Tutors
Masters & PhDs.
100% Confidential
Your privacy matters.
On-Time Delivery
Never miss a deadline.
Changes in variables other than the price of a good, such as income or the price of another good lead to a change in demand
Changes in variables other than the price of a good, such as income or the price of another good lead to a change in demand. This corresponds to a shift of the entire demand curve. Critically analyze the law of demand and identify factors that cause demand to shift to the above situation (through diagram)
Expert Solution
As per the Law of Demand: when other things being equal,if the price of a commodity falls, the quantity demanded of it will rise and if the price of a commodity rises, it's quantity demanded will decline.
Thus it indicates the inverse relationship between price and quantity demanded.
Clearly the demand curve moves upwards or downwards as per the changes in price and keeping all other factors constant. When the other factors (except it's own price) changes, the demand curve tends to shift right or left.Such factors are:
- Price of related commodities
- Income of the consumer
- Tastes and preferences of consumers
- Consumer's expectations
Let's discuss how the above factors causes demand curve to shift through the below example:
Archived Solution
You have full access to this solution. To save a copy with all formatting and attachments, use the button below.
For ready-to-submit work, please order a fresh solution below.
