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Economics miscellaneous

  1. A demand curve will not shift:
    1. When only income changes
    2. When only prices of substitute products change
    3. When there is a change in advertisement expenditure
    4. When only price of the commodity changes
Correct Option: D

In economics, the demand curve is the graph depicting the relationship between the price of a certain commodity and the amount of it that consumers are willing and able to purchase at that given price. A change in price of the commodity leads to a movement along the demand curve without shifting it. In simple words, the increase of decrease in price of a commodity only causes contraction or extension of demand (increase causes contraction while decrease
cause extension). Increase or decrease in demand only occurs only when there is a change in other determinants of demand, other than price of the commodity. So when price of the commodity changes, demand curve does not shift; however, when any other determinant of demand changes, the demand curve shifts either rightward or leftward.



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