Managerial Economicsintermediate
Arrange these steps for interpreting a demand change in the correct order.
Answer
Identify whether own price or another determinant changed, Decide whether the demand curve shifts or the buyer moves along it, Apply the law of demand if own price changed, State the resulting direction of quantity demanded or demand
Explanation
### The order
1. **Identify whether own price or another determinant changed**: the cause determines which demand rule applies.
2. **Decide whether the demand curve shifts or the buyer moves along it**: own price means movement; another determinant means a shift.
3. **Apply the law of demand if own price changed**: with other conditions equal, higher own price generally lowers quantity demanded.
4. **State the resulting direction of quantity demanded or demand**: the conclusion should match the identified cause.
### Remember
Diagnose the cause before describing the curve change.
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