Question

Explain the causes of a rightward shift in demand curve of a commodity of an individual consumer.

Answer 1

A rightward shift represents an increase in demand: the consumer is willing to buy more at the same price because a factor other than the commodity’s own price has changed.

The demand curve of an individual consumer may shift rightward because of:

1. A rise in the price of a substitute good.
2. A fall in the price of a complementary good.
3. A rise in income, if the commodity is a normal good.
4. A fall in income, if the commodity is an inferior good.
5. A change in tastes or preferences in favour of the commodity.
6. An expectation that its price will rise in the near future, encouraging purchases now.

The curve shifts from the original demand curve to a new curve to its right; this is not a movement along the original curve.