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we will continue with our chapter number 3
from microeconomics class 12 now we will study
the question number 5 i.e explain the effect
of favorable taste and preferences on demand
curve of the given commodity it means that
when your taste and preference is favorable
for some particular good than what will be
the impact of such on its demand we will first
make its schedule there are two things in
the schedule first price and second demand
of the given commodity what is changing in
this case is favorable taste and preference
since there is no information about price
of the given commodity thus price will remain
constant due to favorable taste and preferences
due to this demand of the given commodity
increases lets make its diagram now on x axis
we take quantity and on y axis we take price
initially price was 10 thus op is the initial
price marked in the diagram and at this price
op demand is OQ due to favorable taste and
preferences demand of the given commodity
increases from 100 to 200 i.e at price of
10 which is same as initial price as a result
of it demand increases from OQ to OQ1 initial
demand curve is DD and new demand curve is
D'D' it shifted to the right side now now
the explanation of this will be when price
was OP demand was OQ due to favorable taste
and preferences demand of the given commodity
increases from OQ to OQ1.
As a result of it demand curve shifts rightward
from DD to D'D'.
now another question on this will be explain
the effect of unfavorable taste and preferences
on demand curve of the given commodity if
taste and preference is unfavorable what will
happen demand will fall thus demand curve
will shift leftward in this case clear please
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