Draw a Demand Curve and Label It D1

question 127

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.a decrease in income and the good is a normal good
b.a decrease in income and the good is an inferior good
c.an increase in the price of a substitute good
d.an increase in the price of a complementary good
e.a decrease in the taste for the good
f.an increase in population
g.a decrease in the expected future price of the good

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Definitions:

MR<MC

A condition in microeconomics indicating that the marginal revenue is less than the marginal cost, suggesting a decrease in profit if production is increased.

Decrease Production

The act of reducing the quantity of goods produced by a business or economy.

Firm Should

Advises or considerations regarding strategic decisions that businesses ought to follow to achieve objectives such as profitability, growth, or sustainability.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually pay.