Three of the following can shift the market demand curve for a good. Which one is the odd one out?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Change in the prices of inputs used in production
Demand depends on things that matter to buyers: their incomes, their number and the prices of related goods.
The prices of inputs matter to firms. A rise in an input price raises the cost of production and shifts the supply curve. It does not change what buyers want.
NCERT (2026-27): “Shifts in Demand and Supply In the above section, we studied market equilibrium under the assumption that tastes and preferences of the consumers, prices of the related commodities, incomes of the consumers, technology, size of the market, prices of the inputs used in production, etc remain constant. However, with changes in one or more of these factors either the supply or the demand curve or both may shift, thereby affecting the equilibrium price and quantity. …” “Supply Shift … Let us consider a situation where all other things remaining constant, there is an increase in the price of an input used in the production of a commodity. This will increase the marginal cost of production of the firms using this input. Therefore, at each price, the market supply will be less than before. Hence, the supply curve shifts leftward. In the Figure 5.3(a), this is shown by a shift in the supply curve from SS0 to SS2. But this increase in input price has no impact on the demand of the consumers since it does not depend on the input prices directly. Therefore, the demand curve remains unchanged. In Figure 5.3(a), this is shown by the demand curve remaining unchanged at DD0. As a result, compared to the old equilibrium, now the market price rises and quantity produced decreases.” |