Running Head: DEMAND CURVE 1

Demand Curve

Student’s Name

Professor’s Name

Institution Affiliation

Date
Demand Curve 2

Demand Curve

1. Another Restaurant Opens Across the Street.

This implies the Entry of a new business, and that introduces competition to the existing

business. When a new competitor enters the environment of a monopolistic market, the firm's

perceived demand curve shifts to the left. In this case, the demand curve will shift from D0 to

D1. An introduction of a new restraint means that the buyers have a wide range to choose from.

Therefore, the monopolistic restaurant can decide to reduce its foods and beverages to attract

many customers and hence have control over the market.

Figure 1 Demand curve shifts to the left

2. You Advertise on Paper

Increased product promotion, such as advertisement through print media, aims to increase the

demand for the product. An increase in advertisement causes the demand curve to shift to the

right. A significant component in determining the demand for a product is the advertising
Demand Curve 3

prowess a business puts into promoting the sale of its goods, particularly the product of the

company that makes advertising (Alquist, Bhattarai & Coibion, 2020). The goal of publicity is to

influence customers for the benefit of a product. Advertisement of the product ensures the

consumers know the availability of the products, products tastes, prices, and location. In this

case, the demand will shift from D1 to D2.

3. You Develop a Tastier Dish

When the foods prepared by the restraint are made tastier, it will attract many customers to

visit the restaurant more often. This will increase the demand for the foods, and therefore the

demand curve of the product shifts to the right. The preferences and tastes of the consumer are an

essential aspect that influences the demand for the item. A good for which customers' tastes and

preferences are larger, its demand would be huge and, thus, its demand curve would be higher.

The likes and preferences of the people for different commodities often vary, and the demand for

them changes as a result.

Demand Curve 4

References

Alquist, R., Bhattarai, S., & Coibion, O. (2020). Commodity-price comovement and global

economic activity. Journal of Monetary Economics, 112, 41-56.