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प्रश्न
Explain the effect of change in prices of the related goods on demand for the given good.
उत्तर
Effect of change in price of related goods:
i. Demand for a commodity in relation to price of the substitute good When the price of one good falls, it becomes cheaper in relation to another good. As a result, one good is substituted for the other good such as coffee and tea. Assume tea and coffee are two substitute goods. D1 is the demand curve for the demand of tea in diagram (a).
Increase in price of substitute good:
When the price of tea is OP1, the quantity demanded is OT1 as shown in diagram (a). If there is an increase in the price of the substitute good coffee, then the demand curve for tea shifts to the right. Now, the consumer is willing to buy P1C2 quantity of tea which is equal to OT2. Greater the purchase of a commodity at its constant price points to a situation of increase or forward shift in the demand curve. The consumer demand curve shifts from D1 to D2, consuming more of tea even when its price is constant.
Decrease in price of substitute good:
When there is a decrease in the price of the substitute good coffee, the demand curve for tea shifts to the left even when its price is constant. When the price of tea is OP1, the quantity demanded is OT1 as shown in the diagram (b). Now, the consumer is willing to buy P1C2 quantity of tea which is equal to OT2. Thus, the consumer shifts from D1 to D2, consuming less of tea even when the price of tea is constant. This is a situation of backward shift in the demand curve.
ii. Demand for a commodity in relation to price of the complementary good Complementary goods are purchased jointly such as ink and ink pens. Increase in price of complementary good: If there is an increase in the price of a good, then the demand for another good will decline. So the demand curve shifts parallel to the left, i.e. from D1D1 to D2D2.
Decrease in price of complementary good:
If there is a decrease in the price of a good, then the demand for another good will increase. So the demand curve shifts parallel to the right, i.e. from D1D1 to D2D2.
संबंधित प्रश्न
Market of a commodity is in equilibrium. Demand for the commodity "increases." Explain the chain of effects of this change till the market again reaches equilibrium. Use diagram.
Prices of other goods and demand for the given good.
Explain how do the following influence demand for a good:
i. Rise in income of the consumer.
ii. Fall in prices of the related goods
Distinguish between individuals demand and market demand.
Good Y is a substitute of good X. The price of Y falls. Explain the chain of effects of this change in the market of X.
What does a rightward shift of demand curve indicate?
State with reason, whether you Agree or Disagree with the following statement.
The demand curve slopes downward from left to right.
Write explanatory notes or answer the following.
Aggregate demand
Do you agree with the following statement? Give reason
There are no exceptions to the law of demand.
Do you agree with the following statement? Give reason
State and explain the law of demand.
Statements related to decrease in demand
- It is a type of change in demand
- It takes place due to unfavourable changes in other factors like tastes, income etc.
- Price remains constant
- Demand curve shifts to the right hand side of the original demand curve
Identify the correctly matched items from Column I to that of Column II:
| Column I | Column II |
| (1) Demand Curve of Perfect Competition | (a) V-shaped Curve |
| (2) Demand Curve of Monopoly | (b) U-shaped Curve |
| (3) Demand Curve of Monopolistic Competition | (c) Upward rising |
| (4) Demand Curve of Oligopoly | (d) In-determinant |
Explain why the demand curve slopes downwards.
- Assertion (A): The demand curve slopes downwards.
- Reasoning (R): A fall in the price of goods increases the real income of the consumer enabling him/her to buy more.
Study the following table and answer the questions:
| Price of Ice Cream (₹) | Quantity Supplied | Market Supply | ||
| Seller A | Seller B | Seller C | (A + B + C) | |
| 50 | 0 | 2 | 5 | 7 |
| 100 | 1 | `square` | 10 | 15 |
| 150 | `square` | 6 | 15 | 23 |
| 200 | 3 | 8 | 20 | `square` |
| 250 | 4 | 10 | `square` | 39 |
Questions:
- Complete the above table.
- State whether the following statements are True or False.
(a) Market supply has a direct relation to price.
(b) As the price rises from ₹50 to ₹250, market supply rises from 7 to 39. This indicates an increase in supply.
Draw a straight-line demand curve joining both the axes. Indicate the following on the demand curve.
Elasticity of demand is equal to zero
