Question

3. Using diagrams, explain the impact of following on the demand for (a) Bread, when its price rises (b) Desktop computers, when laptop prices fall.​

Answer 1

Answer:

) Demand for a commodity will decrease when there is a fail in the price of substitute goods. Implying that demand curve would shift backward: less will be purchased at the same price. Demand for commodity falls from PK to PK1. Fig. (a) illustrates this situation. (ii) Demand for a commodity will decrease also when there is a fall in income of the consumer (assuming that the commodity demanded is a normal good). This would imply a backward shift in demand curve: less goods will be purchased at the same price. Demand for a commodity falls from PK to PK1. Fig. (b) illustrates