Shifts in Demand Curve
The demand curve you drew on the 22
Aug the curve indicatesthe level of demand of the product at various prices
Draw the same curve for the same parameters and contemplate what will happen to the Demand Curve if say INCOMEINCREASES.
Name the old Demand curve as D1 and the new one as D2.
There will be a SHIFT in the demand curve and this could happendue to any of the following reasons:
Rise in household income
Rise in price of substitutes
Fall in price of complements
Change in taste /preferences
Expected rise in the price of the product.
22nd Aug 2011 2EFM Faculty P.Uday Shankar