ECONOMICS
ELASTICITY OF DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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a change in advertising expenditure on Z
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a change in the individual’s income
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a change in the individual’s tastes
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a change in the price of Z
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Detailed explanation-1: -A change in the price of a good does not shift the demand curve. Instead, it causes a movement along the demand curve.
Detailed explanation-2: -The price of the product does not lead to a shift in the demand curve. Income is not the only factor that causes a shift in demand. The other things that change demand include tastes and preferences, the composition or size of the population, the prices of related goods, and even expectations.
Detailed explanation-3: -Factors that can shift the demand curve for goods and services, causing a different quantity to be demanded at any given price, include changes in tastes, population, income, prices of substitute or complement goods, and expectations about future conditions and prices.
Detailed explanation-4: -A change in price does not shift the supply curve.
Detailed explanation-5: -A change in demand means a shift in consumer desire to purchase a particular good or service, irrespective of a difference in its price. From the options given above, the price of the commodity does not cause a change in demand, option D is therefore correct.