Question

Explain the diagram given below.

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 changes in factors other than price, the demand curve shifts from DD to D₁D₁, indicating an increase in demand. The demand curve shifts to the left, as denoted by demand curve D₂D₂ indicates a decrease in demand when other factors become unfavourable.