Giving reason, state the impact of each of following on demand curve of a normal good ‘X’ if
i) Price of its complementary good falls.
ii) News reports claims that consumption of product X has harmful effect on human health.
iii) Income of consumer increases,
Giving reason, state the impact of each of following on demand curve of a normal good ‘X’ if
i) Price of its complementary good falls.
ii) News reports claims that consumption of product X has harmful effect on human health.
iii) Income of consumer increases,
(i) Demand of the good X will increases, hence demand curve of good X shifts towards right.
(ii) Demand of Good X may decrease as people may be inclined to consume less due to media reports of harmful effect of the good X, as a result, demand curve may shift towards left.
(iii) When income of consumer increases the disposable income increases and consumer is in a better position of spending more on the good X. Hence consumer may consume more of the commodity due to which the demand for the good increases and demand
curve shifts away from origin.
(i) Demand of the good X will increases, hence demand curve of good X shifts towards right.
(ii) Demand of Good X may decrease as people may be inclined to consume less due to media reports of harmful effect of the good X, as a result, demand curve may shift towards left.
(iii) When income of consumer increases the disposable income increases and consumer is in a better position of spending more on the good X. Hence consumer may consume more of the commodity due to which the demand for the good increases and demand
curve shifts away from origin.
