Giving reason, state the impact of each of following on demand curve of a normal good 'X' if: (i) Price of its complementary goods falls. (ii) News reports claim that consumptions of product X has effect on human health. (iii) Income of consumer increases.

Giving reason, state the impact of each of following on demand curve o

1.	Giving reason, state the impact of each of following on demand curve of a normal good 'X' if: (i) Price of its complementary goods falls. (ii) News reports claim that consumptions of product X has effect on human health. (iii) Income of consumer increases.
Answer» Solution :(i) When price of COMPLEMENTARY good falls, its demand would increase. Demand of good X will also increase, as X is complementary of the good hence demand curve of good X will shift to its right. (ii) Demand of good X would decrease as CONSUMERS will tend to consume less due to NEWS reports of HARMFUL effects of good X on their health (iii) As income of consumer increases, he would demand more of the good as his DISPOSABLE income increases and he is in a position to buy more of good X.