Business – 3.1 The nature of marketing – Demand and supply | e-Consult
3.1 The nature of marketing – Demand and supply (1 questions)
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When consumers expect higher future income, they tend to increase current spending, shifting the demand curve to the right.
| Effect on demand | Shift right (increase) |
| Effect on equilibrium price | Price rises |
| Effect on equilibrium quantity | Quantity rises |
Because supply is unchanged, the right‑ward demand shift creates a new intersection at a higher price and higher quantity. The magnitude of the change depends on the price elasticity of both demand and supply; if demand is relatively elastic, the quantity increase will be larger relative to the price rise, and vice‑versa.