List the factors that change demand and shift the demand curve. Tell what happens to demand and the demand curve when there is an increase in the factor
What will be an ideal response?
One factor that changes demand is a change in income. An increase in income increases demand and shifts the demand curve rightward for a normal good. An increase in income decreases demand and shifts the demand curve leftward for an inferior good. A change in the price of a substitute or complement also changes demand. An increase in the price of a substitute increase demand and shifts the demand curve rightward while an increase in the price of a complement decreases demand and shifts the demand curve leftward. Expectations, the number of buyers, and preferences also change demand. If people expect their income to increase, or if they expect its price to be higher in the future, or if the number of buyers increases, or if people's preferences for the good increase, demand increases and the demand curve shifts rightward.
You might also like to view...
Rank the following goods from most elastic to least elastic: fruit, apples, Granny Smith apples
A) Fruit, apples, Granny Smith apples B) Apples, Granny Smith apples, fruit C) Granny Smith apples, apples, fruit D) The goods cannot be ranked by elasticity because it ultimately involves the problem of comparing apples to oranges.
The Doing Business reports provide information on ________
A) the size of a country's national debt B) the rate of inflation C) the independence of individual central banks D) how easy it is to conduct business in different parts of the world