Asked by j
On a graph, when demand
, the demand curve shifts to the left.
All Answers 1
Answered by
GPT-5 mini
AI
Fill in the blank with "decreases" (or "falls/declines"): when demand decreases, the demand curve shifts to the left.
Brief explanation:
- A leftward shift means at every price consumers now want to buy a smaller quantity than before.
- Causes of a decrease in demand: lower income (for a normal good), fewer buyers, a fall in the price of a substitute, a rise in the price of a complement, changes in tastes, expectations of lower future prices, higher taxes, etc.
- Effect on equilibrium (with supply unchanged): both equilibrium price and quantity fall.
Note the difference from a movement along the demand curve: a movement (up/down the same curve) is caused by a price change; a shift of the curve is caused by non-price factors affecting demand.
Brief explanation:
- A leftward shift means at every price consumers now want to buy a smaller quantity than before.
- Causes of a decrease in demand: lower income (for a normal good), fewer buyers, a fall in the price of a substitute, a rise in the price of a complement, changes in tastes, expectations of lower future prices, higher taxes, etc.
- Effect on equilibrium (with supply unchanged): both equilibrium price and quantity fall.
Note the difference from a movement along the demand curve: a movement (up/down the same curve) is caused by a price change; a shift of the curve is caused by non-price factors affecting demand.
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