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Discuss what happens to the equilibrium price and quantity of Colgate Toothpaste when there is a...

Discuss what happens to the equilibrium price and quantity of Colgate Toothpaste when there is a decrease in the demand for Colgate Toothpaste but no change in the supply. What could cause a decrease in the demand for Colgate Toothpaste but no change in supply?
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Answer #1

Ans) Factors affecting demand ÷

  • Consumer income.
  • Consumer taste and preference.
  • Price of related goods.
  • Number of buyers.

Factors affecting supply ÷

  • Number of sellers.
  • Price of input.
  • Change in technology.

When demand decreases but there is no change in supply, both equilibrium price and quantity decreases. This could have happened due to decrease in price of other toothpaste or decrease in popularity of colgate etc. But these factors do not affect supply (as discussed above).

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