Use internet or printed publications to identify example of

Use internet or printed publications to identify example of Decrease in Demand.

Also address the following:

the initial equilibrium

identify the shock Decrease in Demand

the resulting equilibrium

compare resulting equilibrium prices and quantities to the previously existing ones

Solution

Decrease in Demand:-

When demand of a good falls at the given price, it is called Decrease in Demand.

Decrease in demand takes place due to following reasons:-

1) Fall in income of the consumer:- With the fall in income of consumer, demand for normal goods decreases as the purchasing power of people is less.

2) Fall in price of substitute goods:- The demand of goods fall with the fall in price of substitute goods. Take example of Tea and coffee. They are the substitute goods. If the price of tea falls, its demand increases and accordingly, the demand for the coffee falls.

3) Rise in price of complementary goods:- The demand for a good falls with a rise in price of its complementary goods. Take example of Petrol and Car. They are complementary goods. When price of petrol rises, not only its demand falls but the demand for car also falls and as a result demand curve shift to left.