Anonymous
Feb 9, 2024
With the aid of diagram, disquish between increase in demand and decrease in demand?
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ChatGPT
Feb 9, 2024
Certainly! Here is a diagram illustrating the difference between an increase in demand and a decrease in demand:
Increase in Demand:
- An increase in demand refers to a situation where consumers are willing and able to purchase a higher quantity of a product at each price level.
- This is represented by a rightward shift of the demand curve.
- The demand curve is labeled as D1, and when it shifts to D2, it indicates an increase in demand.
- As a result, the equilibrium price (P1) and quantity (Q1) both increase, moving to a new equilibrium point at P2 and Q2.
Diagram:
```
Price
^
|
P2 | D2
| /
P1 | /
| /
| /
Q1 | /
| /
|/
----------------> Quantity
Q1 Q2
```
Decrease in Demand:
- A decrease in demand refers to a situation where consumers are willing and able to purchase a lower quantity of a product at each price level.
- This is represented by a leftward shift of the demand curve.
- The demand curve is labeled as D1, and when it shifts to D2, it indicates a decrease in demand.
- As a result, the equilibrium price (P1) and quantity (Q1) both decrease, moving to a new equilibrium point at P2 and Q2.
Diagram:
```
Price
^
|
P1 | D1
| /
P2 | /
| /
| /
Q2 | /
| /
|/
----------------> Quantity
Q1 Q2
```
In summary, an increase in demand is represented by a rightward shift of the demand curve, leading to higher equilibrium price and quantity. On the other hand, a decrease in demand is represented by a leftward shift of the demand curve, resulting in lower equilibrium price and quantity.
Increase in Demand:
- An increase in demand refers to a situation where consumers are willing and able to purchase a higher quantity of a product at each price level.
- This is represented by a rightward shift of the demand curve.
- The demand curve is labeled as D1, and when it shifts to D2, it indicates an increase in demand.
- As a result, the equilibrium price (P1) and quantity (Q1) both increase, moving to a new equilibrium point at P2 and Q2.
Diagram:
```
Price
^
|
P2 | D2
| /
P1 | /
| /
| /
Q1 | /
| /
|/
----------------> Quantity
Q1 Q2
```
Decrease in Demand:
- A decrease in demand refers to a situation where consumers are willing and able to purchase a lower quantity of a product at each price level.
- This is represented by a leftward shift of the demand curve.
- The demand curve is labeled as D1, and when it shifts to D2, it indicates a decrease in demand.
- As a result, the equilibrium price (P1) and quantity (Q1) both decrease, moving to a new equilibrium point at P2 and Q2.
Diagram:
```
Price
^
|
P1 | D1
| /
P2 | /
| /
| /
Q2 | /
| /
|/
----------------> Quantity
Q1 Q2
```
In summary, an increase in demand is represented by a rightward shift of the demand curve, leading to higher equilibrium price and quantity. On the other hand, a decrease in demand is represented by a leftward shift of the demand curve, resulting in lower equilibrium price and quantity.
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