Analyse 2 causes of shifts in the demand curve and the consequence for the consumer.

The demand curve describes the quantity of goods and services that consumers are willing and able to purchase at any given price over a given period of time ceteris paribus.
An increase in a consumer's income will lead to an increase in demand. This is represented by a right-shift in the demand curve from D1 to D2. This is because the consumer now has a larger level of disposable income to spend on consumption. This means that the level of demand increases at each and every price i.e. at price, P, quantity demanded increases from QD1 to QD2.
Alternatively, a decrease in the price of a substitute good will lead to a decrease in demand. This is represented by a left-shift in the demand curve from D3 to D4. This is because the substitute now appears relatively cheaper causing the consumer to switch towards consumption of the substitute. This means that the level of demand decreases at each and every price i.e. at price, P, quantity demanded decreases from QD3 to QD4.
Shifts in the demand curve are caused by changes in:Population; Advertising; Substitutes; Income; Fashion + trends; Interest rates; Complements (PASIFIC)Given the option, I would focus on the emboldened factors.

JL
Answered by James L. Economics tutor

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