Question

Identify 3 factors that can shift the demand curve? Most common ones.

Answer 1

Ans) the 3 factors that lead to shift in the demand curve

1) Change income : for a normal good, an increase in income will increase the demand for a good and shift the demand curve to the right whereas a decrease in income will decrease demand shift it to the left

2) change in the price of related goods: when two goods are substitutes, an increase in the price of one good increases the demand for other good. When goods are complements, an increase in the price of one good decreases the demand for other good

3) change in number of buyers : increase in number of buyers increases the demand and decrease in number of buyers decreases demand