Question

Explain the diagram given alongside.

Answer 1

The diagram shows change in demand. DD is the initial demand curve. Price remaining the same (at OP level) when demand rises due to change in factors other than price, demand curve shifts from DD to D₁D₁ indicating increase in demand. Demand curve shifts to the left as denoted by demand curve D₂D₂ indicates decrease in demand when other factors become favourable.