Give three reasons (or causes) of a rightward shift of demand curve.
Or
Explain briefly any three factors which lead to 'increase in demand'.
Give three reasons (or causes) of a rightward shift of demand curve.
Or
Explain briefly any three factors which lead to 'increase in demand'.
Following are the three causes of a rightward shift of the demand curve of a commodity:
(i) Increase in the income of the consumers: When the incomes of the consumers rises, the demand for normal goods generally rises at the given price and as a result the demand curve of the commodity shifts to the right which implies an increase in demand. See Fig. (a).
(ii) Rise in the price of substitute good: When the price of a good (say coffee) rises, the demand for coffee falls and the demand for its substitute good (say tea) rises at the given price, and as a result the demand curve of the good (tea) shifts to the right which implies an increase in demand. See Fig. (b).
(iii) Fall in the price of complementary good: When the price of a good (say petrol) falls, not only the demand for petrol rises but also the demand for its complementary good (say car) rises at the given price and as a result the demand curve of the good (car) shifts to the right which implies an increase in demand. See Fig. (c).
Following are the three causes of a rightward shift of the demand curve of a commodity:
(i) Increase in the income of the consumers: When the incomes of the consumers rises, the demand for normal goods generally rises at the given price and as a result the demand curve of the commodity shifts to the right which implies an increase in demand. See Fig. (a).
(ii) Rise in the price of substitute good: When the price of a good (say coffee) rises, the demand for coffee falls and the demand for its substitute good (say tea) rises at the given price, and as a result the demand curve of the good (tea) shifts to the right which implies an increase in demand. See Fig. (b).
(iii) Fall in the price of complementary good: When the price of a good (say petrol) falls, not only the demand for petrol rises but also the demand for its complementary good (say car) rises at the given price and as a result the demand curve of the good (car) shifts to the right which implies an increase in demand. See Fig. (c).
