Identify and explain two factors that have caused a shift

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Reference no: EM133366797

Question: Identify and explain two factors that have caused a shift in the demand curve. Illustrate the impact on the market using supply and demand curves.

Note: please make 1 graph for demand, and 1 graph for supply according to the information given below
1. factors causing shift in Demand Curve hand bags

a. An Increase in Consumer Income: There is a possibility that there will be an increase in demand for luxury bags if there is an increase in the average income of consumers. This is as a result of the fact that customers now have the opportunity to acquire more luxury bags as a direct result of their higher salaries, which in turn has led to an increase in the demand for bags of this type. This can be demonstrated with the supply and demand curves shown below, which show that an increase in consumer income results in an upward shift of the demand curve, which in turn produces an increase in the equilibrium price as well as the quantity of luxury bags.

b. An Increase in Fashion Trends: An increase in the number of fashion trends being worn might also lead to an increase in the number of people looking for luxury bags. This is because the most recent fashion trends can have an effect on a consumer's desire to purchase luxury bags, which in turn leads to a rise in the demand for such bags. This may be seen by looking at the supply and demand curves shown below, which show that an increase in fashion trends results in an outward movement of the demand curve, which in turn produces an increase in the equilibrium price and number of luxury bags.

Reference no: EM133366797

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