Question

The following questions are very important regarding demand, supply and market under difference price scenario. Therefore, I would like you to list your answers and check other answers for better learning outcome. this is from the book The scope and method of economics. answer all the questions that you can!

1. List factors will shift consumer demand. The shift in demand curve is called?
2. List factors will shift producer supply. The shift in supply curve is called?
3. What factor results in a movement along the demand curve? The movement on demand curve referred to as ?
4. What factor results in a movement along the supply curve? The movement on supply curve is referred to as?

Answer 1

1. List factors will shift consumer demand. The shift in demand curve is called?

A shift in demand curve is called change in demand.

A shift in a demand  curve occurs when a good's quantity demanded changes even though price remains the same.

Factors causing shift in the demand curve:

• Size of the market: Demand will change or shift if the number of consumers for the product increases. The demand curve will shift to the right.
• Income of the consumers: Changes in income shifts the demand curve. Increases in income increases the demand for normal goods and decreases in income increase the demand for inferior goods. The demand curve will shift to the right.
• Increase in the price of related goods. If the price of substitute goods falls, then there is a shift in the demand. If price of large cars increase, then the demand for small cars will increase. Demand curve will shift to the right for small cars. In case of complements, as an example, if the price of gasoline increases demand for cars will fall. The demand curve for cars will shift to the left
• Tastes and preferences of consumers. Demand will depend upon the tastes and preferences of consumers. If there is a preference for health foods, then the demand curve for health foods will shift to the right.
• Expectations: If the consumers expect the prices to fall in the future, then demand curve will shift to the left.

The shift in supply curve is called change in supply. Shifts in supply curve are caused by factors other than price.

Shifts in supply are caused by

• Changes in costs of production. Lower costs of product will shift supply curve to the right.
• Technological advances. Supply curve will shift to the right as more goods can be supplied.
• Prices of related goods. If prices of large cars increase, then supply of small cars will increase.

Supply Determinants. Aside from prices, other determinants of supply are resource prices, technology, taxes and subsidies, prices of other goods, price expectations, and the number of sellers in the market. Supply determinants other than price can cause shifts in the supply curve.

The movement along a demand curve is referred to as change in quantity demanded. A movement along the demand or supply curve occurs when a change in quantity supplied is caused only by a change in price, and vice versa.

The movement along a supply curve is referred to as change in quantity supplied.