The following are causes of shift in demand EXCEPT the onea)Change in ...
The correct answer is B:Change in price.
Explanation:
To explain in detail, let's first understand the concept of demand. Demand refers to the quantity of a good or service that consumers are willing and able to purchase at a given price level. A shift in demand refers to a change in the entire demand curve, which represents a change in the quantity demanded at all price levels.
Now, let's discuss the factors that cause a shift in demand:
1. Change in income: An increase in consumers' income generally leads to an increase in demand for goods and services, as people can afford to buy more. Conversely, a decrease in income leads to a decrease in demand.
2. Change in price: This factor does not cause a shift in demand. Instead, it causes a movement along the demand curve. When the price of a good or service increases, the quantity demanded decreases, and when the price decreases, the quantity demanded increases. This is known as the law of demand. A change in price does not shift the demand curve but causes a movement from one point to another on the same demand curve.
3. Change in fashion: As consumer preferences and tastes change, the demand for goods and services may also change. For example, if a particular clothing style becomes popular, the demand for that style will increase, causing a shift in the demand curve.
4. Change in prices of substitutes: Substitutes are goods that can replace each other in consumption. If the price of a substitute good increases, consumers may choose to buy the original good instead, which will increase the demand for the original good. On the other hand, if the price of a substitute decreases, consumers may switch to the substitute, causing a decrease in demand for the original good. This results in a shift in the demand curve.
In conclusion, changes in income, fashion, and prices of substitutes can cause shifts in demand, while a change in price results in a movement along the demand curve rather than a shift.
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The following are causes of shift in demand EXCEPT the onea)Change in ...
Shift in Demand: Causes and Explanation
Shift in demand refers to a change in the quantity of a good or service that consumers are willing and able to purchase at a given price over a period of time. A shift in demand is caused by various factors that influence consumer behavior and their willingness to buy a particular product or service. The following are the causes of shift in demand:
Change in Income
One of the primary causes of shift in demand is a change in consumer income. When consumers' income increases, they tend to purchase more goods and services, leading to a shift in demand for certain products. On the other hand, a decrease in income leads to a decrease in demand for products.
Change in Fashion
Another cause of shift in demand is a change in fashion or consumer tastes and preferences. For example, when a new fashion trend emerges, consumers tend to shift their demand from the old fashion to the new one. This leads to a shift in demand for the products associated with the new fashion trend.
Change in Prices of Substitutes
The price of substitutes, which are alternative products that consumers can use in place of a product, can also cause a shift in demand. When the price of a substitute decreases, consumers tend to switch to the substitute product, leading to a decrease in demand for the original product.
Explanation of the Correct Answer
The correct answer is option 'B' - Change in Price. This is because a change in price does not cause a shift in demand, but a movement along the demand curve. A decrease in price leads to an increase in quantity demanded, while an increase in price leads to a decrease in quantity demanded, resulting in a movement along the same demand curve.
The following are causes of shift in demand EXCEPT the onea)Change in ...
Change in price includes contraction and exemptions of demand
all other factors shift the demand curve except price