Exercise 1: Identifying the determinants of demand. In worksheet 5B, you have seen have how an increase in demand is depicted on a graph by a shift in the demand curve. • When the demand curve shifts upward and to the right, this is indicative of an increase in demand. • When the demand curve shifts to the left, this is indicative of a decrease in demand. • Factors that result in a change in demand are the determinants of demand. Working as a part of a team of three or four, complete the table below. For each determinant of demand: • indicate whether demand will increase or decrease; • provide an explanation as to why.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
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Chapter3: Demand Analysis
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Problem 2E: The price elasticity of demand for personal computers is estimated to be 2.2. If the price of...
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Exercise 1: Identifying the determinants of demand. In worksheet 5B, you have seen have how an increase in demand is depicted on a graph by a shift in the demand curve. • When the demand curve shifts upward and to the right, this is indicative of an increase in demand. • When the demand curve shifts to the left, this is indicative of a decrease in demand. • Factors that result in a change in demand are the determinants of demand. Working as a part of a team of three or four, complete the table below. For each determinant of demand: • indicate whether demand will increase or decrease; • provide an explanation as to why.
Price of substitute increases
Price of substitute decreases
Price of complementary good
increases
Price of complimentary good
decreases
Product becomes a popular fad
(change in taste of buyers)
Product now out of fashion (change
in taste of buyers)
There is an expectation that the price
of the product will soon fall
There is a fear that the economy will
go into a recession where many firms
will fail and unemployment will
increase
Transcribed Image Text:Price of substitute increases Price of substitute decreases Price of complementary good increases Price of complimentary good decreases Product becomes a popular fad (change in taste of buyers) Product now out of fashion (change in taste of buyers) There is an expectation that the price of the product will soon fall There is a fear that the economy will go into a recession where many firms will fail and unemployment will increase
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