Question

The diagram below illustrates the supply and demand for television sets. The original demand curve is D₂

Using the diagram, state the new demand curve (D₁ or D₃ ) which will apply after each of the following changes taken place. (The same answer may be used more than once)

1. A successful advertising campaign for television sets occurs 

2. Income decreases 

3. An increase in the population

Answer 1

1. Demand increases (D₂ curve shifts right to D₃)

2. Demand decreases (D₂ curve shifts left to D₁)

3. Demand increases (D₁ curve shifts right to D₃)