Answer to Question #204320 in Microeconomics for Dikshya

Question

• Draw a demand curve for Wai Wai noodles.  What happens to it in each of the following scenarios?   Why?
• The price of 2pm noodles increases
• The income of a consumer who treats Wai Wai as an inferior good increases
• The taste of majority of consumers shifts away from Wai Wai to Ramen noodles
• The price of wai wai increases
• Famous Newspaper publishes an article on harmful effects of instant noodles

Answer 1

. When the price of 2pm increases, the quantity will also increase.

.When the income of the customers increases, the quantity demanded will increase, which may similarly increase the price.

.when the price of Wai Wai increases, the quantity will also increase

. When the famous newspaper publishes on the harmful effects, consumers will be discouraged and this will decrease the demand, hence decreasing the quantity and price