Factors shifting demand curve, Microeconomics

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Factors Shifting Demand Curve:

 

Factors Changing

Demand

Effect on

Demand

Direction of Shift in Demand Curve

Effect on Equilibrium Price

Effect on Equilibrium Quantity

Increase in income

(normal good)

Increase

Rightward

Increase

Increase

Decrease in

income(normal good)

Decrease

Leftward

Decrease

Decrease

Increase in income

(inferior good)

Decrease

Rightward

Decrease

Decrease

Decrease in

income(inferior good)

Increase

Rightward

Increase

Increase

Increase in price of

Substitute

Increase

Rightward

Increase

Increase

Decrease in price of

substitute

Decrease

Rightward

Decrease

Decrease

Increase in price of

complement

Decrease

Leftward

Decrease

Decrease

Decrease in price of

complement

Increase

Rightward

Increase

Increase

Increase in taste and

preference for good

Increase

Rightward

Increase

Increase

Decrease in taste and

preference for good

Decrease

Leftward

Decrease

Decrease

Increase in number of

consumers

Increase

Rightward

Increase

Increase

Decrease in number of

consumers

Decrease

Leftward

Decrease

Decrease

 

Market demand curve  is  the  graphic representation of  the  market demand which shows the quantities of the commodity to which the consumers are willing able to purchase during the period of time at various alternative prices/costs, while holding constant everything else which effects the demand. The market demand curve for the commodity is negatively sloped, indicating that more of the commodity is purchased at the lower price.


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