Question

1 3 2.00 New demand curve B Newsweek price p 1.50 - Initial 1.00 - demand curve D1 Q D2 .50 - 0 1.5 3.0 4.5 6.0 7.5 4.5 6.0 7.5 9.0 10.5 12.0 Quantity demanded per year (millions of units) The firm's price remained the same but changes occurred in consumer tastes. A downward economic shift caused a proportionate change in consumer income. Ob. There were more product substitutes available in the marketplace. Competitors in the market lowered their prices. d. The firm increased its prices and consumers perceived the value of the product to be greater

Answer 1

The firms price remained the same but changes occurred in consumer tastes.

( The diagram is showing a shift in demand curve from initial demand curve to new demand curve. A positive change in consumer preferences toward the product must have shifted the demand curve to right.

*A shift occurs as a result of change in variables that influence quantity demanded other than price. If it was a Change in price, a movement would have happened along the demand curve there would have been no other demand curve .

* lf there was a downward economic shift, then income would have experienced a fall. A fall in income would have shifted the demand curve to left not to right.

* lf there were many substitutes available, it would have affected the shape of the demand curve, a shift won't have happened.

* lf competitors lowered prices, then consumers would have gone for their products, a leftward shift in demand curve would have been the result not a downward shift.

* lf consumers perceived the existence of a higher price, then there would have been a decline in quantity demanded.)