Question

1. List the six factors that can cause a shift in the demand curve in markets for goods and services. 2. Depict a market and show the change to the market from an increase in income. 3. Depict a market and show the change to the market from a decrease in preference for a good.

Answer 1

Question 1

Answer : A change in factors effecting demand can be make the quantity demanded either move along the demand curve or as a shift in demand curve. A change in price will cause a movement along demand curve and factors other than price will cause a shift in demand curve. Those factors which will cause a shift in demand curve are as follows,

• Income of the consumer
• Taste an preference of the consumer
• Price of related goods
• Expectations of the consumers
• Size of population
• The advertising expenditure made by a firm for promoting their product.