Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Increase in consumer income
B
Decrease in the price of fuel
C
Increase in the price of substitute cars
D
Decrease in consumer preferences for luxury items
Understanding the Answer
Let's break down why this is correct
Answer
A rightward shift in the demand curve for a luxury car happens when more people want the car at every price, so the quantity demanded rises. This can occur if consumers’ incomes rise, because a luxury car is a normal good that people buy more of when they can afford it. It also happens if the price of a substitute, like a high‑end SUV, goes up, making the car relatively cheaper. A change in tastes that makes the car more fashionable can also push the curve to the right. For example, if a new luxury car model receives rave reviews, more buyers will want it, shifting demand outward.
Detailed Explanation
When people earn more money, they can afford pricier items. Other options are incorrect because Lower fuel costs make driving cheaper, but that only changes how much people want to drive, not how many want a luxury car; If a substitute car becomes more expensive, people might switch to the luxury car, but the effect is small compared to income.
Key Concepts
Shifts in Demand Curve
Consumer Income
Substitute Goods
Topic
Shifts in Demand Curve
Difficulty
easy level question
Cognitive Level
understand
Practice Similar Questions
Test your understanding with related questions
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Question 1Which of the following events would most likely cause a rightward shift in the demand curve for a normal good?
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Question 2Which of the following scenarios would most likely cause a rightward shift in the supply curve for smartphones?
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Question 3A sudden increase in consumer income leads to a shift in the demand curve for luxury cars. Which of the following best explains this change?
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Question 4Which of the following factors can cause a shift in the demand curve for a product? Select all that apply.
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Question 5Arrange the following factors that can shift the demand curve in the correct order of their impact on consumer demand: A) Change in consumer preferences, B) Change in income, C) Change in prices of related goods, D) Change in population size.
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Question 6Which of the following factors can cause a shift in the supply curve for a product? Select all that apply.
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Question 7Arrange the following factors that can cause a rightward shift in the supply curve in the correct order: A) Decrease in production costs, B) Introduction of new technology, C) Government subsidies, D) Increase in producer expectations.
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Question 8If the supply curve for electric cars shifts to the right, what is the most likely underlying cause for this change?
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Question 9Which of the following factors would likely cause a rightward shift in the supply curve for smartphones?
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