Question & Answer » Commerce Question » Distinguish between the increase in demand and the decrease in demand.

Distinguish between the increase in demand and the decrease in demand.

Answer:

Increase in demand

Decrease in demand

When more quantity is demanded than before at the same price, it refers to an increase in demand. 

When less quantity is demanded than before at the same price, it refers to a decrease in demand.

An increase in demand is denoted by a shift in the demand curve to the right.

A decrease in demand is denoted by a shift in the demand curve to the left.

An increase in demand happens when more is purchased at the same price and the same quantity is purchased at a higher price.

A decrease in demand happens when less is purchased at the same price or the same quantity at a lower price.

An increase in demand is caused by a rise in income, a rise in the price of substitutes, a decrease in the price of complementary goods, an increase in population, and when goods are fashionable.

A drop in demand is caused by a drop in income, a drop in the price of substitutes, an increase in the price of complementary goods, a drop in population, or when goods become out of style.

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