Solution : (i) A rise in price of Substitute good <br> (a)Substitute goods are the goods that can be used in place of another goods and give the same satisfication to a consumer. <br> <img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/FM_M_ECO_XII_P1_C03_E02_062_S01.png" width="80%"> <br> (b) There would always exist a direct relationship between the price of substitute goods and demand for given commodity. <br> (c ) Due to rise in price of substitute (Say Coffee from Rs 500 to Rs 550), the demand of tea and shift rightward from DD to `D_(1)D_(2)` as shown in given figure: <br> (ii) A rise in price in Complementary good <br> <img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/FM_M_ECO_XII_P1_C03_E02_062_S02.png" width="80%"> <br> (a) Complementary goods are those which are useless in the absence of another good and which are demanded jointly.<br> (b) There would always exist an inverse relationship between price of complementary goods and demand for given commodity. <br> (c ) Due to rise in price of Comple mentary good (Say Tea from Rs 500 to Rs 550), the demand of Sugar shift leftward from DD to `D_(1)D_(1)` , as shown in given figure. Show
Solution (i) The demand for a commodity and unfavourable change in taste of the buyer are inversely related to each other. When there is an unfavourable change in taste of the buyer for the commodity, the demand for the commodity falls at the same price and as a result, the demand curve shifts to the left. The following diagram shows the effect : (adsbygoogle = window.adsbygoogle || []).push({}); In the diagram, demand curve of X is shown by the DD curve. With an unfavourable change in taste of the buyer for the commodity, the quantity demanded of good X, falls from OQ to OQ1 at the same price OP. The demand curve shifts leftward from DD to D1D1(ii) The demand for an inferior good and change in the income of the buyers are inversely related to each other. When there is a fall in the income of the buyers, the demand for the inferior good rises and as a result, the demand curve shifts to the right.The following diagram shows the effect : (adsbygoogle = window.adsbygoogle || []).push({}); In the diagram, demand curve of X (inferior good) is shown by DD curve. With a fall in the income of the buyer, the quantity demanded of inferior goods rises from OQ to OQ1 at the same price OP. The demand curve shifts rightward from DD to D1D1.What is the effect of the following on demand for a commodity price of the commodity?1 Answer. (i) Demand for a commodity will decrease when there is a fail in the price of substitute goods. Implying that demand curve would shift backward: less will be purchased at the same price.
What is the effect of rise in price of complementary goods on the demand of the given good use diagram?Complementary goods exhibit a negative cross elasticity of demand: as the price of goods Y rises, the demand for good X falls.
What is law of demand explain with the help of diagram?The law of demand expresses a relationship between the quantity demanded and its price. It may be defined in Marshall's words as “the amount demanded increases with a fall in price, and diminishes with a rise in price”. Thus it expresses an inverse relation between price and demand.
What is the diagram of change in demand?An increase and decrease in total market demand is illustrated in the demand curve, a graphical representation of the relationship between the price of a good or service and the quantity demanded for a given period of time.
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Explain with the help of diagram the effect of the following changes on the demand of a commodity
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