Question

1. Using the following data, graph the demand curve for cheeseburgers The Market For Cheeseburgers Quantity Demanded per Month Price $5 $4 $3 $2 $1 10 15 20 25 2. Now suppose consumer preferences change and consumers are willing to purchase double the amount of cheeseburgers at every price level. Shift the demand curve from #1 to reflect the change. 3. List the determinants of demand. #2 above involves the "consumer tastes/preferences" determinant. For the rest of them, create an example that applies to the cheeseburger market and say which way the demand curve would shift (left or right), based on your example.

Answer 1

1、 5 euw Demand 6 5 10 15 20 25 &ua Lla

2.

3.

tox2= 20 IS 20 2-S 8

3.

Determinants of demand for a good:

1. Price of Commodity: Other things remaining the same, with a rise in price of the commodity, its demand contracts and with fall in the price, its demand extends. This inverse relationship between price of commodity and its demand is called Law of Demand.

2. Price of related goods: Demand for a commodity is also affected by the change in the price of related goods like substitute goods or complementary goods. Substitute goods are those goods which are used in place of one another. Increase in the price of one good increases the demand of other good and vice-versa. On the other hand, complementary goods are those goods which jointly satisfy a particular want of consumer. Increase in the price of one good decreases the demand of other good.

3. Income of the consumer: Increase in the income of consumer increases the demand of normal good while reduces the demand of inferior goods.

4. Taste and Preference of the consumer: If consumer have favourable taste and preference for the good then demand of that good increases and vice-versa. Favourable taste shifts demand curve rightwards while unfavourable taste shifts demand curve leftwards.

5. Expectation: If people expect that price of commodity will reduce in near future then people demand less goods today and as a result, demand decreases.