For each of the below, indicate if the curve in question would shift to the left
ID: 1131660 • Letter: F
Question
For each of the below, indicate if the curve in question would shift to the left, to the right, or not at all. Assume perfect competition, and that other than the change listed everything else remains the same (i.e. ceteris paribus).
How would the DEMAND CURVE shift if there was:
A decrease in income and the good is a normal good
An increase in the price of a substitute good
An increase in population
A decrease in the taste for the good
An increase in the price of a complementary good
How would the SUPPLY CURVE shift if there was:
An increase in the number of firms in the market
An increase in the current price of the product
A decrease in productivity
An increase in the expected future price of a product
A decrease in the price of an input
Explanation / Answer
An decrease in income and good in normal good :In this case,the demand curve shifts to right when consumers income increases.
An increase in income of substitute good : in this case ,the increase income ,the demand can decrease and shifts to left of demand curve.
An increase in population:as rule ,a larget population results in ahigher demand for goods results the demand curve shifts to right .
A decrease in taste for the good:when good or service comes into fashion ots demand curve shifts to right.by contract ,the demand curve shifts to left ,once a new trend emerges and the good or service goes out of fashion again
An imcrease in the price of a complementary goods:the demand for goods is decrease when the price of another good is increased if good x and y are complements ,and increase of price of x will resultd in aleft ward movement along the demand curve of x and cause the demand curve y to shift in
•an increase in the numbers of firms in the market:Number of firms in the market is derterminant of market supply .as number of firms increase,eaxh additional furm produces some amount of output.with increase in output in the economy of the good increases
The price being unchanged more is supplied at the same price. thus supply curve shifts to right
An increase in the current price of the product:the law of supply says that as price of good increase,suppliers willbe willing and able to supply greater quantities of that good,all other factors unchanged or held comstant.this represents by an inward(left ward)shift of the supply curve
An decrease in productivity:clearly,if productivity increases ,the average production cost of a unit of output will fall,and this cause the aggreagate supply curve to shift outward
An increase in the expected future price of a product shifts curve left because of less of good will be offered for sale today to take advantage of the higher price in the future
An decrease in the price of an input shifts supply curve right the costd of producing the good falls
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