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- when price decrease purchasing power of the people increases so they can buy more with the same amount of money this is called income effect.
- if the price of some commodity say mangoes decreases while the price of its substitute like apple remain the same people fell that this commodity is relatively cheaper so they decrease the purchase of apples and buy more of mangoes this is substitution effect.
- fall in price bring new buyers into the market many people who could not buy at higher price now start buying
Wiki User
∙ 11y ago
Wiki User
∙ 10y agoDemand (units sold) will drop as price increases. More people will buy a product when the price is low; less people will buy the same product when the price is high.
Wiki User
∙ 11y agoas price of an item rises the demand for it in the market normally decreases. that is a negative slope.
there are markets where this is not the case, but they are considered abnormal.
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Which direction does the demand curve slope?
Is always negative. (should be in all caps for emphasis)
Indifference curve analysis is not much in use because it only tells us that demand curve has a negative slope except when they don't .?
indifference curve analysis is not much in use because it only tells us that demand curve has a negative slope except when they don't ....
Demand curve slopes downwards from left to right. this is the negative slope that shows the inverse relationship between price and demand. explain why does the demand curve slope downwards?
because demand decreases as price increases :)
Why does the demand curve have negative slope?
because quantity is on x axis and price is on y axis and as the price increase the demand decrease
Is the price elasticity constant along the demand curve?
Price elasticity of demand is equal to the instantaneous slope of the demand curve, or the slope of the tangent line at any point on the demand curve. So if the demand curve is represented by a straight downward sloping line, then yes, price elasticity of demand is equal to the slope of the demand curve. Otherwise, the slope at any point on the curve is changing, and you can find the it by taking the derivative of the demand curve function, which will find the Price elasticity of demand at any single point. Thus, the Price Elasticity of Demand changes at different points on the demand curve.
Which direction does the demand curve slope?
Is always negative. (should be in all caps for emphasis)
Indifference curve analysis is not much in use because it only tells us that demand curve has a negative slope except when they don't .?
indifference curve analysis is not much in use because it only tells us that demand curve has a negative slope except when they don't ....
Demand curve slopes downwards from left to right. this is the negative slope that shows the inverse relationship between price and demand. explain why does the demand curve slope downwards?
because demand decreases as price increases :)
Does a demand curve always have a positive slope?
Demand curves almost always have negative slopes. The Y value being price and the X value being quantity. The higher the price, the more negative the slope. There are very rare conditions where a demand curve could have a positive slope, but its not normally used in business classes.
Why does the demand curve have negative slope?
because quantity is on x axis and price is on y axis and as the price increase the demand decrease
What does the imply of flat money demand for the slope of IS curve?
dore's econ 2p22 eh
Is the price elasticity constant along the demand curve?
Price elasticity of demand is equal to the instantaneous slope of the demand curve, or the slope of the tangent line at any point on the demand curve. So if the demand curve is represented by a straight downward sloping line, then yes, price elasticity of demand is equal to the slope of the demand curve. Otherwise, the slope at any point on the curve is changing, and you can find the it by taking the derivative of the demand curve function, which will find the Price elasticity of demand at any single point. Thus, the Price Elasticity of Demand changes at different points on the demand curve.
True or False The real wealth effect is one reason for the negative slope of the aggregate demand curve?
true
What is difference between slope and the calculation of elasticity for a linear demand curve?
Along a linear demand curve elasticity varies from point to point of the demand curve with respect to different price, but slope is constant
What is the typical slope of a demand curve?
Downward
What is negaitve slope?
You're familiar with the xy-plane. A line with negative slope is one that goes down toward the right. A curve has a negative slope at a point if the tangent line to the curve at that point has a negative slope.
Is demand curve canbe upwardly sloping?
A demand curve can have an upwards slope. It solely depends on if the demand for an item is high or low.
