Which of the following will not cause a change in the demand curve for cars?a.A change in the price of carsb.A change in the price of petrolc.A change in the quality and quantity of public transportd.A change in household incomee.A change in the number of buyers
Question
Which of the following will not cause a change in the demand curve for cars?a.A change in the price of carsb.A change in the price of petrolc.A change in the quality and quantity of public transportd.A change in household incomee.A change in the number of buyers
Solution
The demand curve for a product, in this case cars, can shift due to a variety of factors. These factors include changes in income, changes in the prices of related goods, changes in tastes or preferences, changes in expectations, and changes in the number of buyers.
a. A change in the price of cars: This will not cause a change in the demand curve for cars. Instead, it will cause a movement along the same demand curve. When the price of cars increases, the quantity demanded decreases and vice versa, but the demand curve itself does not shift.
b. A change in the price of petrol: This could cause a shift in the demand curve for cars. If petrol becomes more expensive, people might demand less cars, especially those with high fuel consumption. This would cause the demand curve to shift to the left.
c. A change in the quality and quantity of public transport: This could also cause a shift in the demand curve for cars. If public transport options improve, people might need less cars, causing the demand curve to shift to the left.
d. A change in household income: This could cause a shift in the demand curve for cars. If people's income increases, they might demand more cars, causing the demand curve to shift to the right. Conversely, if income decreases, the demand curve could shift to the left.
e. A change in the number of buyers: This could cause a shift in the demand curve for cars. If more people enter the market for cars, the demand curve could shift to the right. Conversely, if fewer people want to buy cars, the demand curve could shift to the left.
So, the answer to your question is a. A change in the price of cars will not cause a change in the demand curve for cars.
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