What causes shifts in the demand curve with
examples, plese clearly explain and illustrate.
Criteria
- all answers must be complete and length 600 V 700 words per
question
- the assumptions upon which the analysis is based must be stated at
the outset.
- Sources must be acknowledged and a list of references provided.
Demand curve is a plan of purchase. let's consider the following
example. imagine that you only have $10 and want to buy some apples.
If the price of apple is $1 each, you may decide to buy 10 apples (if
you think it is cheap). However, if the price of apple increases to $2
each, you may decide to buy only 2 apples at this price and waiting
for a future price deduction. That's what I called a plan of purchase.
This simple example illustrate that expection about the future price
movement will cause a shift in the demand curve. Actually you should
know that in the demand and supply diagram the vertical axis is
"price" and the horizontal axis is "quantity demanded". "Price" is the
independent variable and "quantity demanded" is the dependent
variable. It means a price variation will only cause a movement along
the demand curve. Therefore any factors other than "price" affecting
your plan of purchase will cause a shift in the demand curve. Factors
like "FUTURE price expectation", "changing of taste(like eating
oranges now)" and "changing of income(you have $100 now)" are some
examples.
hope this can help you answer your question.
Hi!!
Also take a look to this page, you will enjoy it.
"Economics Interactive Lecture: Supply and Demand":
http://hadm.sph.sc.edu/COURSES/ECON/SD/SD.html
Have fun
livioflores-ga
Hi tom123!!
Here I am, still working!!
Demand is the relationship that exists between the price of a good or
service and the quantity of that good or service that a consumer (or a
group of consumers) is able and willing to buy; it is the relationship
between different prices and the amounts people desire to buy at each
price.
Demand is an inverse (falling) function of the price; this is the
called Law of Demand, and it can be stated as follows:
"Ceteris Paribus (other things remaining equal), the quantity of a
good demanded will rise with every fall in its price and the quantity
of a good demanded will fall with every rise in its price."
This means that the demand of a good or service functionally depends
on its price. However, the demand is also causally related to other
factors such as income of costumers, prices of substitutes, the tastes
of the consumer, etc.
On a given demand curve as we move downwards along the demand curve
the quantity demanded goes on rising with every successive fall in
price. On the contrary, moving upwards we can observe a fall in the
quantity demanded with every successive rise in the price. This means
that a change in the price of the product (other things remaining
equal) causes a movement along the demand curve.
There are also other factors which alter the quantity demanded. This
can be expressed by a shift in the demand curve.
The demand curve may shift and quantity demanded may increase or
decrease, due to changes in a number of factors (apart from price),
say the income of a consumer (when he becomes richer or poorer). A
similar effect can be observed with a rise or fall in the price of
substitute and/or complement goods. For instance, tea and coffee or
soaps of different brands are substitutes of each other. Therefore a
rise in price of pasta may result in a reduction in the consumption of
pasta and simultaneously an increase in the consumption of bread to
that extent and vice versa. Or the demand curve may shift and quantity
demanded may increase at the old price if there is a sudden increase
in the number of members in a family, (say because of the unexpected
arrival of guests). Finally, a shift in the demand curve may also be
the result of the change in the tastes of a consumer. A cigarette or
liquor consumer may become addicted because of which his demand for
such goods will rise remarkably even at the old price.
There is an important difference between the change in the quantity
demanded of a particular commodity and change in the demand for that
commodity. While the former is influenced by the single factor: price,
the latter is influenced by various other factors apart from price. A
change in the quantity demanded is represented by a movement along the
demand curve, while a change in the demand is represented by a shift
of the curve (towards the left in case of a decrease and towards the
right in case of an increase).
At the department of Agricultural and Applied Economics at Virginia
Tech I found some pages which will show you how the shifts on the
demand curve; please visit this pages to see the graphs:
"If an increase in consumer income stimulates additional purchases of
widgets, the demand curve shifts upward and to the right. If this
occurs, widgets are called normal goods". An increase in consumer
income, however, may cause a decrease in demand for some goods
(represented as a downward shift in the demand curve). These types of
goods are called inferior goods."
From "Page 2 of Shifts in the Demand Curve" - Agricultural and Applied
Economics at Virginia Tech:
http://classnotes.aaec.vt.edu/aaec1005/coursematerials/DemandExamples/demandshifts2.htm
"A change in consumers’ tastes and preferences for widgets will cause
a change in the demand for widgets. A decrease in consumer preferences
for widgets will shift the demand curve for widgets downward and to
the left."
From "Page 3 of Shifts in the Demand Curve" - Agricultural and Applied
Economics at Virginia Tech:
http://classnotes.aaec.vt.edu/aaec1005/coursematerials/DemandExamples/demandshifts3.htm
"Suppose consumers tend to buy sprockets when they buy widgets
(sprockets and widgets are related goods). A change in the price of
sprockets will shift the demand curve for widgets. If the price of
sprockets decreased and consumers bought more sprockets and widgets,
widgets and sprockets are called complements. Due to the price
decrease in sprockets, the widget demand curve now shifts upward and
to the right (shown on graph below).
If sprockets and widgets were substitutes, a decrease in the price of
sprockets would decrease the demand for widgets."
From "Page 4 of Shifts in the Demand Curve" - Agricultural and Applied
Economics at Virginia Tech:
http://classnotes.aaec.vt.edu/aaec1005/coursematerials/DemandExamples/demandshifts4.htm
"A change in consumer expectations can also shift the demand curve for
widgets. Suppose a potential labor strike against the major widget
manufacturers raises concerns among consumers about the future price
and availability of widgets. Consumers might rush out to buy more
widgets while they can, increasing the current demand for widgets
(represented by a shift in the demand curve upward and to the right).
Nothing else has changed except consumer’s expectations of the
future."
From "Page 5 of Shifts in the Demand Curve" - Agricultural and Applied
Economics at Virginia Tech:
http://classnotes.aaec.vt.edu/aaec1005/coursematerials/DemandExamples/demandshifts5.htm
Sources: You can improve this answer by consulting the following
sources.
ECONOMICS by Paul A. Samuelson, Ed. McGraw Hill, chapter 3 "Basic
Elements of Supply and Demand ".
To see the curves and graphics related to this topics please visit:
http://www.mhhe.com/economics/samuelson17/students/Ch3.mhtml
OUTLINE OF MICROECONOMIC THEORY by Dominick Salvatore, chapter 2
"Demand, Supply and Equilibrium: An Overview".
I hope this helps you in this topic. If you think that this answer is
incomplete, need a clarification or have troubles with links, please
post a Request for an answer clarificatioon and I will respond to you.
Search strategy:
shifts "demand curve"
"demand curve"
demand economics course
Search engine:
Google
Thank you for asking to Google Answers.
Best Regards.
livioflores-ga
Demand curve shifts are covered for instance at
http://ecedweb.unomaha.edu/Dem_Sup/shifts.htm
http://bear.cba.ufl.edu/rush/ECO2023/resources/chapterDiscussions/demand.asp
http://www.econ.ohio-state.edu/courses/hslim/econ201/lectures/w1_3.ppt
http://econ.bu.edu/gilchrist/teaching/ec102/supplyanddemand.PDF
http://www.econ100.com/australia/mac/stips/demand.htm
With the search 'demand curve shifts', you should be able quickly to
identify additional sources.
Best,
-David
I have ensured that all information provided in this post is correct
to my best knowledge. However, I make no representations about the
suitability of the information contained in this post for any purpose.
All my posts are provided "as is" without warranty of any kind. I
hereby disclaims all warranties and conditions with regard to this
information, including all implied warranties and conditions of
merchantability, fitness for a particular purpose, title and
non-infringement. In no event shall I be liable for any special,
incirect or consequential damages or any damages whatsoever resulting
from loss of use, data or profits, whether in an action of contract,
negligence or other tortious action, arising out of or in connection
with the use or performance of information available from this post.
Some links in this post will let you leave it. The linked sites are
not under my control and I am not responsible for the contents of any
linked site, or any changes or updates to such sites. I am not
responsible for webcasting or any other form of transmission received
from any linked site. I am providing these links to you only as a
convenience, and the inclusion of any link does not imply my
endorsement of the site (cf. art. 17 para. 1 ECG, art. 18 para. 1 ECG,
Austrian Law). Economics Elasticty Question - Math Help Forum::
Hello all, I have a problem here that seems horribly simple, but when I input my answer, I get it incorrect. The equation my teacher gave for.
http://www.mathhelpforum.com/math-help/business-math/76994-economics-elasticty-question.htmlHOME |
Take a 10-question economics 101 quiz! - WalletPop Blog::
Take a 10-question economics 101 quiz! Zac Bissonnette Jan 23rd 2009 at 2:30PM. Text SizeAAA. Filed under: Extracurriculars, Kids and Money
http://www.walletpop.com/blog/2009/01/23/take-a-10-question-economics-101-quiz/HOME |
 Where's The Advantage In Windows Genuine Advantage?
 Stocks Bounce After S&P Joins Bear Market |
HOME
PRINT
Add to favorites