Question

Give three reasons which lead to increase in demand of commodity.

Answer 1

1. Increase in Income: When consumers’ income increases, they can afford to buy more. As a result, demand for normal goods increases, shifting the curve to the right.
2. Favourable Change in Tastes and Preferences: If a commodity becomes more popular or fashionable, more people want to buy it. This leads to an increase in demand, shifting the curve rightward.
3. Increase in Price of Substitute Goods: If the price of a substitute (like tea for coffee) increases, consumers shift to the original good. This raises its demand and shifts the demand curve to the right.