Chapter 7, Problem 15AA

To determine

To evaluate: The impact on the demand curves when the income and population rises.

Explanation of Solution

There are various factors that lead to the change for the demand for a product like price of the related goods, income, and taste and preferences etc. The slope of the demand curve shift downward from left to right, which reflects the law of demand, as the rate of a given product increases, the amount demanded decreases, and all else is equal. If the income of the consumer increases the demand for the product also increases because consumer is in a condition to satisfy their luxury needs. So in the same way the changes in population also changes demand because more products need to produce due to rise in population. As a result demand curve will increase.

Economics Concept Introduction

Introduction:  The demand curve shows a graphical presentation of the relationship between a product or service’s price and the sum required over a given timeframe.