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| 1. |
Explain the chain of effects of 'increase' in demand of a good. |
| Answer» Solution :Increase in demand for the good LEADS to a rightward shift in the demand curve. The increase in demand leads to COMPETITION among buyers causing a push in the market price. The INCREASED price leads to an increase in the SUPPLY and a fall in demand leading to a new equilibrium where both the price and quantity DEMANDED are higher. | |