List and describe three causes for shifts in the demand curve. 11. why do economists use percentage change to calculate elasticity of demand? 12. what are four factors that affect elasticity?

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Business

Jamir Stevenson

16 July, 00:19

List and describe three causes for shifts in the demand curve. 11. why do economists use percentage change to calculate elasticity of demand? 12. what are four factors that affect elasticity?

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Yellow · Answer 1

Average income - if the income increases that means the quantity demanded of a product will also increase hence leading to a shift in the demand curve as people will have more disposable income, hence able to purchase more items

seasonality - a product may experience a shift in the demand curve as a result of the season, people tend to purchase a product in a certain season. so when the season ends, the demand for the product reduces, hence the quantity purchased decreases.

availability of substitutes - a shift may be experienced as a result of availability of substitutes int he market. if a product was enjoying monopoly then a substitute is introduced, the product will experience competition from the substitute as people will have the freedom to choose which item to go for (quality, price etc)