F3 - SEM1 - Change in Demand - 2D

Question 1

What are the 2 possible directions when demand changes?

2D Change in Demand

Answer 1

• Increase in demand - the quantity demanded increases at the same price. The demand curve moves rightward
• Decrease in demand - the quantity demanded decreases at the same price. The demand curve moves leftward

2D Change in Demand

Question 2

How does increase in demand affect the equilibrium price, equilibrium quantity and total revenue?

2D Change in Demand

Answer 2

• equilibrium price - increases
• equilibrium quantity - increase
• total revenue - increase

2D Change in Demand

Question 3

How does decrease in demand affect the equilibrium price, equilibrium quantity and total revenuve?

2D Change in Demand

Answer 3

• equilibrium price - decreases
• equilibrium quantity - decreases
• total revenue - decreases

2D Change in Demand

Question 4

What are the other factors that change the demand?

2D Change in Demand

Answer 4

• Income of consumer changes - income increases, demand increases; income decreases, demand decreases
• Taste of consumer changes - change in taste in favour of a good, the demand increases; change in taste not favour of a good, the demand decreases
• Number of consumer changes - number of consumer increases, demand increases; number of consumer decreases, demand decreases

2D Change in Demand