Question

Indicate whether a change in the value of each of the following determinants of demand leads to a movement along the demand curve or a shift in the demand curve. i. Change in market price: ii. Change in income:iii. Change in consumer expectations:iv. Change in the price of a related good:v. Change in the price of an unrelated good: vi. Change in preferences for this good:

Answer 1

Answer:

movement along the demand curve: i

shift in the demand curve: ii, iii, iv, vi

no effect: v

Explanation:

A change in the price of the product causes quantity demanded to change. It will be indicated by a movement on the same demand curve.  

A change in other factors will cause the demand for the product to change. It is indicated by a shift in the demand curve.  

i. Change in the market price: movement along the demand curve

ii. Change in income: shift in the demand curve

iii. Change in consumer expectations: shift in the demand curve

iv. Change in the price of a related good: shift in the demand curve

v. Change in the price of an unrelated good: no effect

vi. Change in preferences for this good: a shift in the demand curve