Which of the following statements about the factors that influence demand is true?
A)As the availability of close substitutes increases, the demand for a product increases.
B)As real consumer income increases, demand for a product increases.
C)As the price of close substitutes increases, demand for a product increases.
D)Changing consumer tastes have little impact on demand for a product.

Question

Quizplus · Accepted Answer

As real consumer income increases, people have more purchasing power and are able to buy more of a product, thereby increasing demand. Option A is incorrect as availability of close substitutes tends to decrease demand. Option C is incorrect as an increase in price of close substitutes will make the product more attractive and hence increase demand. Option D is also incorrect as changing consumer tastes can have a significant impact on demand for a product.

Which of the Following Statements About the Factors That Influence