Causes of a shift of demand Flashcards
1
Q
Causes of a shift of the demand curve
A
- Change in the price of demand
- Change in price of any FoP
- Productivity of labour
- Supplementary costs
2
Q
Why does the productivity of labour shift demand
A
Increases in the output per input ( productivity), firms will get more revenue for the same cost, demand will increase
3
Q
Why does a change in price of any FoP of labour shift demand
A
If capital decreases, demand for labour will fall.
4
Q
What is supplementary costs and why does it shift demand
A
extra cost of hiring workers, e.g. national insurance. If supplementary costs rice demand for labour will fall
