Question

explain the causes of a leftward shift in demand curve of a commodity

Answer 1

Causes of a Leftward shift in demand curve of a commodity:

1) Substitution effect: When the price of a good falls, it becomes relatively cheaper than other substitute goods. This attracts consumers to substitute the good whose price has fallen for substitute goods, which have know become relatively expensive.

2) Income effect: When the price of a commodity falls, the consumer can buy more quantity of a good with his given income, as a result of a fall in the price of the good, consumer's real income or purchasing power increases.

3) Law of Diminishing Marginal Utility.

Answer 2

Answer:

law of diminishing mu and income effect are the main causes of one mark answer..

Explanation:

and for 3 marks see above..