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Increase or Decrease in Demand

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Determine if, for the good marked with ALL CAP lettering, if there is an increase or decrease in demand.
A. A new fashion trend dictates the wearing of KILTS.
B. The price of APPLES.
C. The price of Pepsi, a substitute for COKE, increases.
D. The price of DOG FOOD increases.
E. The consumers start liking MINIVANS all of a sudden.
F. The price of food used to feed DOGS increases.
G. A fall in income forces prospective YACHT owners to cut back on luxuries.
H. Growers of ORANGES unexpectedly receive extremely favorable weather.
I. An increase in pet related crimes (stealing of pets) worries prospective new owners of CATS and dogs.
J. An outbreak of infectious diseases increases the number of people who buy SOAP.

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Solution Summary

How to increase or decrease demands are determined. The price of Pepsi as a substitute for Coke is determined.

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A. A new fashion trend dictates the wearing of KILTS. <- This will lead to an increase in demand as the KILTS will now be in fashion and thus seeked more.

B. The price of APPLES. < - If the price of APPLES increases, there will be a decrease in demand (if the price reduces, there will be an increase in demand).

C. The price of Pepsi, a substitute for COKE, increases. <- Since the price of the ...

Solution provided by:
Gaurav Agarwal, MS
Education
  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
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