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Change in consumer Taste/preference:Any change in consumer taste or preference causes demand to change. Increased taste or preference for a particular good causes demand to increase whilst declining taste or preference causes demand to fall, ceteris paribus. Taste or preference for goods and services are influenced by advertisement, fashion and sales promotions. Change in consumer expectationsThe decision to buy a commodity today is influenced by the expected future price of the commodity and expected change in consumer income. If a consumer anticipates the price of a commodity to increase in future, today’s demand for the commodity will increase but if the consumer anticipates a fall in future price, then today’s demand for the commodity will fall.Similarly, an expected consumer income increase may cause demand for a normal commodity to increase and vice versa.
traditional theory of cost
What is the benefit (main work) of economics in our life? Economics plays a very important role in development of a country. A country's economy shows the stability of that co
The cross elasticity of demand calculates the responsiveness of the quantity demanded of one product to alters in the price of another product. For example, the quantity demanded
clarify the opportunity cost theory
Explain why goods provided by natural monopolies are often publicly owned. It would seem that most normal monopolies come with high MSB and also that society has deemed these g
GROWTH OF EMPLOYMENT OPPORTUNITIES: Several disquieting features are observed in the Indian labour market over the past two decades particularly during the 1990s. These are di
Assignments
1. Seller has ample time to adjust to price change. 2. Buyer's response to small price change is significant. 3. Buyers are faced with many options when deciding to make a
The Acme Bakery in the seaside resort town of Malvino sells freshly baked bread to two categories of consumers: residents of the town and tourists. The weekly demand from touris
What does the IS-LM framework mean? The IS-LM model helps us to understand the two opposing theories. The IS (investment/saving) curve shows equilibrium in product markets. Th
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