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  Increase and decrease in demand

Shifts in demand or Increase and decrease in demand:

One of the fundamental assumptions of economic theory is ‘other things being equal’. Other things are tastes, income, technology, population, government policy, price of associated goods and so on. Change in these factors will bring about raise or reduce in demand. In figure show below the augment in demand is shown by the shifts of the demand curve to the right from DD to D2 D2. The decrease in demand is revealed by the shift to the left from DD to D1 D1. The raise and reduce in demand are shifts in demand curves.

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 Figure: Shifts in Demand

 

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