changes in demand

                                               CHANGES IN DEMAND

 

When demand for commodities increases or decreases due to a change in other factors, while the price of a commodity remains constant, is known as a change in demand.

 

Changes in demand are of two types:

    A)  Increase in demand: increase in demand refers to an increase in quantity demanded due to favorable changes in other factors like income, habits, and taste, while the price is constant.

The demand curve shifts to the right side of original demand curve indicating an increase in the quantity demanded due to changes in other factors.

 Explanation:

1)  Price P is constant, therefore changes are due to changes in other factors.

2) favourable changes in other factors leads to increase in quantity demanded from OQ to OQ1.

3) increase in demand is shown by shift of demand curve to right side of original demand curve.

B) Decrease in demand: decrease in demand refers to a decrease in quantity demanded due to unfavorable changes in other factors like income, habits, and taste, while the price is constant.

The demand curve shifts to the left side of original demand curve indicating a decrease in the quantity demanded due to changes in other factors.

      

  Explanation:

1)  Price P is constant, therefore changes are due to changes in other factors.

2) unfavourable changes in other factors leads to decrease in quantity demanded from OQ to OQ1.

3) decrease in demand is shown by shift of demand curve to left side of original demand curve.