Draw a Demand Curve and Label It D₁

question 45

Essay

Draw a demand curve and label it D₁.On the graph, illustrate an increase in demand and a decrease in demand, and label the curves D₂ and D₃, respectively.Starting on demand curve D₁, explain the shift that would result from each of the following events:
a.an increase in income and the good is a normal good
b.an increase in income and the good is an inferior good
c.a decrease in the price of a substitute good
d.a decrease in the price of a complementary good
e.an increase in the taste for the good
f.a decrease in population
g.an increase in the expected future price of the good

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Definitions:

Transfer Price

The price at which goods and services are sold between divisions within the same company or between controlled or related entities.

Direct Materials

Raw materials that are directly attributable to the product being manufactured and are a significant component of its cost.

Variable Manufacturing Overhead

Costs of manufacturing that vary with the level of production, such as utilities for the production facility and raw materials.

Cash Conversion Cycle

A metric that measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.