A market survey analyzes consumer behavior in the Nigerian energy sector regarding solar inverter batteries. Match each economic event listed on the left with its corresponding geometric effect on the solar inverter battery demand curve on the right.
- An increase in the price of petrol used for household electricity generatorsRightward shift of the demand curve caused by an increase in the price of a substitute energy source
- A sharp decrease in average household disposable income across urban centersLeftward shift of the demand curve, assuming solar inverter batteries are a normal good
- A reduction in the retail market price of solar inverter batteriesDownward movement along the demand curve representing an increase in quantity demanded
- A nationwide public awareness campaign boosting consumer preference for renewable solar energyRightward shift of the demand curve caused by a favorable shift in consumer tastes and preferences
Answer
Each economic event matches its corresponding impact on the solar inverter battery demand curve based on non-price determinants versus own-price changes. Higher petrol prices for substitute generators cause a rightward shift in solar battery demand. Reduced disposable income causes a leftward shift for normal goods. A price drop in solar batteries themselves leads to a downward movement along the demand curve. A successful campaign promoting renewable energy shifts the demand curve to the right through consumer preference.
Non-price determinants (income, prices of substitutes, consumer tastes) cause the entire demand curve to shift left or right, whereas changes in the commodity's own price only cause a movement along the existing demand curve.
Step-by-Step Solution
Key Concept
Determinants of Demand vs. Changes in Quantity Demanded