Okay this is seriously confusing to me! I cen not seem to see how the demand curve moves in a certain direction. i am trying to get ready for a test so i was working some questions in my book and came across this one... can someone please explain this to me?!?!
The Question:
Explain what happens to the demand curve for apples as a consequence of each of the following:
a. more peoplebegin to perfer apples to oramges.
b. The price of peaches rise (peaches are a substitute to apples)
I would really appreciate someone explaing this concept to me!
2007-02-11 12:41:58 · 5 answers · asked by J*dub 1 in Social Science ➔ Economics
Both of those examples are substitutes related. a. The demand shifts down for oranges, b. The demand for peaches moves down along the demand curve.
a. People now prefer apples not Oranges. Apple Demand curve is shifting up.
b. The price of peaches rises. Less peaches are sold. Some people will decide that apples are a better buy than peaches. Apple Demand curve is shifting up.
2007-02-11 13:42:15 · answer #1 · answered by JuanB 7 · 0⤊ 0⤋
The demand curve is a way of describing the relationship between the cost of apples and the number of apples that will be eaten.
A. In the case of people changing preference to oranges the curve will change. The cost of an apple that used to result in getting a certain number of apples eaten would now result in fewer apples being eaten. The curve that represents the new relationship of cost and demand for apples would be plotted lower on the graph.
B. When the price of peaches rises then fewer peaches would be eaten and more apples would be desired. People who would have eaten peaches before now are willing to pay a little more for apples. The curve that represents that new reality of cost vs demand will be plotted higher on the graph paper.
2007-02-11 16:12:41 · answer #2 · answered by anonimous 6 · 0⤊ 0⤋
The demand curve is the sum of the individual demand of consumers which is determined by their (utilities functions ) indifference curves. The total number of apples that all consumers will buy(vertical axis) at a given price (horizontal axis) is plotted for a several prices and the points connected to make the demand curve.
If people like apples more the will buy more at a given Price so the demand curve will move up
If the Price of peaches rise then people will buy more apples at a given price and the demand curve will move up.
2007-02-11 19:10:54 · answer #3 · answered by meg 7 · 0⤊ 0⤋
Here is a realistic interpretation. In the summer there are many apples available because they are ripening, the demand for apple is fairly low though because people mostly eat other, more summery fruit, like peaches. The price for apples is also lower in the summer because there are so many available (the supply). As fall starts there is less of other fruit available but there is still a high supply of apples. The demand for apples goes up because there is less of other fruit, as the supply of apples lowers the price of apples goes up. In the winter apples are a lot more expensive then in the summer.
Let me know if you have any problems understanding my rambling here.
2007-02-11 13:14:25 · answer #4 · answered by vampire_kitti 6 · 0⤊ 0⤋
What you are saying is impossible under a truly capatalist economy. What happens under capitalism is that the market assigns the resources and output to where it'll obtain the biggest profit. That means that affordable housing exists so long as the proprietor can make at least some marginal profit. On the other hand, all those people who are starving to death are dying because they don't have the means to buy the goods they need in order to live. That's the reality of capitalism.
2016-05-23 23:10:37 · answer #5 · answered by Anonymous · 0⤊ 0⤋