The figure below shows the change in demand for Commodity X which is a normal good. Use it to answer the question that follows. Which of the following cause...

Assessment: WAEC SSCE - Economics - 2020 (Objective) Subject: Economics

Question 1 Report

The figure below shows the change in demand for Commodity X which is a normal good. Use it to answer the question that follows.

Which of the following caused the change in demand from D\(_{1}\) D\(_{1}\) to D\(_{2}\)D\(_{2}\)

Answer Details
The change in demand from D\(_{1}\)D\(_{1}\) to D\(_{2}\)D\(_{2}\) is caused by a rise in the price of a substitute for commodity X. When the price of a substitute for commodity X increases, consumers tend to switch to commodity X, resulting in an increase in demand for commodity X. Therefore, the demand curve for commodity X shifts to the right from D\(_{1}\)D\(_{1}\) to D\(_{2}\)D\(_{2}\). It is important to note that since commodity X is a normal good, a fall in the income of consumers would cause a leftward shift of the demand curve, not a rightward shift. A rise in the price of a complement or a fall in the supply of commodity X would result in a leftward shift of the demand curve for commodity X.

Download The App On Google Playstore

Everything you need to excel in your exams

Green Bridge CBT Mobile App
Personalized AI Learning Chat Assistant
200,000+ Exam Questions Across IGCSE, JAMB, WAEC & NECO
Over 3,900 Lesson Notes
Offline Support - Learn Anytime, Anywhere
Green Bridge Timetable
Literature Summaries & Potential Questions
Track Your Performance & Progress
In-depth Explanations for Comprehensive Learning