ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A change in the price of a good or service causes a movement along a specific demand curve, and it typically leads to some change in the quantity demanded, but it does not shift the demand curve.

Detailed explanation-2: -The demand curve will move downward from the left to the right, which expresses the law of demand-as the price of a given commodity increases, the quantity demanded decreases, all else being equal. Note that this formulation implies that price is the independent variable, and quantity the dependent variable.

Detailed explanation-3: -A change in demand means that the entire demand curve shifts either left or right. The initial demand curve D0 shifts to become either D1 or D2. This could be caused by a shift in tastes, changes in population, changes in income, prices of substitute or complement goods, or changes future expectations.

Detailed explanation-4: -Expansion in demand. A fall in price from $16 to $12 leads to an expansion (increase) in demand. As price falls, there is a movement along the demand curve and more is bought. A change in price doesn’t shift the demand curve – we merely move from one point of the demand curve to another.

Detailed explanation-5: -A slight change in the price will make greater changes in demand is known as elastic. A product is considered to be elastic if the quantity demand of the product changes drastically when its price increases or decreases.