A change in consumer’s expectations causes a movement along the demand curve or a shift in the demand curve? Explain. A change in price of the goods results in a movement along the demand curve or a shift in the demand curve? Explain (Word count: 250 words max.)Buyers' expectations about future prices can affect the demand curve. If consumers expect prices to increase, they buy more of a product now, and the demand curve moves to the right.A demand schedule for a normal good is as follows:Price Quantity demanded Rs.230 70210 90190 110170 130Do you think that the increase in quantity demanded (say, from 90 to 110 in the table) when price decreases (from Rs.210 toRs.190) is due to a rise in consumers’ income? Explain clearly (and briefly) why or why not. Now suppose that the good is an inferior good. Would the demand schedule still be valid for an inferior good?

Demand refers to the volume of goods and services that the consumers are willing to purchase at…

Answered: A change in consumer’s expectations…

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter3: Supply And Demand: Theory

Section: Chapter Questions

Problem 24QP

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A change in consumer’s expectations causes a movement along the demand curve or a shift in the demand curve? Explain. A change in price of the goods results in a movement along the demand curve or a shift in the demand curve? Explain (Word count: 250 words max.)

Buyers' expectations about future prices can affect the demand curve. If consumers expect prices to increase, they buy more of a product now, and the demand curve moves to the right.

A demand schedule for a normal good is as follows:

Price Quantity demanded

Rs.230 70

210 90

190 110

170 130

Do you think that the increase in quantity demanded (say, from 90 to 110 in the table) when price decreases (from Rs.210 toRs.190) is due to a rise in consumers’ income? Explain clearly (and briefly) why or why not.

Now suppose that the good is an inferior good. Would the demand schedule still be valid for an inferior good?

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