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Question-- If consumer spending grew at a very slow pace then the demand curve would still shift to the right?

Question-- If consumer spending grew at a very slow pace then the demand curve would still shift to the right?

Postby veto » Thu Dec 15, 2011 1:48 pm

Question-- If consumer spending grew at a very slow pace then the demand curve would still shift to the right?

Just working on an assignment and unsure of the above question. THANKS IN ADVANCE GUYS <3
veto
 
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Question-- If consumer spending grew at a very slow pace then the demand curve would still shift to the right?

Postby marlan43 » Thu Dec 15, 2011 1:56 pm

Not necessarily! Growth of consumer spending could be the result of price increases only. Since Price is the vertical axis of the Supply/Demand curve, the Demand curve could certainly go UP, assuming the same quantity of items is being demanded by consumers as price increases. But the curve need not go to the right, although it certainly could.

It could go right if consumer spending grew at a slow pace and the quantity of items, along with price, increased correspondingly.
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