ECONOMICS
ELASTICITY OF DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The demand curve shifts to the left.
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The demand curve becomes flatter.
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The demand curve shifts to the right.
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The demand curve becomes steeper.
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Detailed explanation-1: -Q. Which of these is most likely to happen to demand for clothes in a clothing store when blizzards keep customers at home? The demand curve shifts to the left.
Detailed explanation-2: -The demand curve shifts to the left if the determinant causes demand to drop. That means less of the good or service is demanded. That happens during a recession when buyers’ incomes drop. They will buy less of everything, even though the price is the same.
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 leftward shift in the demand curve indicates a decrease in demand because consumers are purchasing fewer products for the same price.
Detailed explanation-5: -For example, in recent years as the price of tablet computers has fallen, the quantity demanded has increased because of the law of demand. Since people are purchasing tablets, there has been a decrease in demand for laptops, which can be shown graphically as a leftward shift in the demand curve for laptops.