Which will not, ceteris paribus, cause the demand curve for good A to shift?Multiple Choicea change in the price of Aa change in the price of B, a complementa change in the price of C, a substitutean increase in average income
Question
Which will not, ceteris paribus, cause the demand curve for good A to shift?Multiple Choicea change in the price of Aa change in the price of B, a complementa change in the price of C, a substitutean increase in average income
Solution
The answer is "a change in the price of A".
The demand curve for a good is determined by factors such as the price of related goods (complements or substitutes), income, tastes and preferences, and expectations. However, a change in the price of the good itself does not shift the demand curve. Instead, it results in a movement along the same demand curve, which represents a change in quantity demanded, not a change in demand. Therefore, a change in the price of good A will not cause the demand curve for good A to shift, all other things being equal (ceteris paribus).
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