Learning Path
Question & Answer
Choose the Best Answer
People are now willing to buy more luxury cars at every price level.
The price of luxury cars has decreased, making them more affordable.
Consumers have less interest in luxury brands, causing a decrease in demand.
The availability of cheaper alternatives has increased.
Understanding the Answer
Let's break down why this is correct
When people earn more, they have extra money to spend. Other options are incorrect because A lower price would only make people buy more cars along the existing curve, not shift the curve; Higher income usually makes people want more luxury items, not less.
Key Concepts
Shifts in Demand Curve
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Deep Dive: Shifts in Demand Curve
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Definition
Shifts in the demand curve occur when factors other than price influence the quantity of a product demanded at each price level. Changes in consumer income, tastes, fashion trends, and prices of related goods can shift the demand curve either outward (increase in demand) or inward (decrease in demand).
Topic Definition
Shifts in the demand curve occur when factors other than price influence the quantity of a product demanded at each price level. Changes in consumer income, tastes, fashion trends, and prices of related goods can shift the demand curve either outward (increase in demand) or inward (decrease in demand).
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