Question

Bob's Burgers charged $3.50 for a quarter-pound hamburger with all the fixin's, and sold 7,500 of them. The following year, although Bob raised the price to $3.75, sales of his burgers rose to 8,200. Use the concepts of a shift in the demand curve versus a movement along the demand curve to explain why this increase in sales does not represent a violation of the law of demand.

Answer 1

Law of demand is not violated but assumptions for other things constant is violated. When prices are raised it results demand of product increases that would have more than off set the decreases in quantity demanded. Consumer income also rises. Consumer taste for the hamburgers increased. The Competitors of Bob also raised their prices more than Bob. Similarly Bob reduced his prices of friest cold drinks. All of this elements are responsible a shit in the entire demand curve. Increase in prices of hamburgers caused a leftward movement along demand curve, but that movement along more than offset by the outward shift of the entire curve. Note: - If you satisfy with answer Please up voles any problem mention in comment Thank You.