Table 4.2 - Demand schedule for automobiles
The following is a hypothetical demand schedule for automobiles.
-In Table 4.2,as price decreases from $24,000 per car to $20,000 per car:
A) The demand curve for cars shifts to the right.
B) Total revenue increases.
C) The quantity of cars demanded decreases.
D) The supply curve for cars shifts to the left.

Question

Table 4.2 - Demand schedule for automobiles
The following is a hypothetical demand schedule for automobiles. 
-In Table 4.2,as price decreases from $24,000 per car to $20,000 per car:
A) The demand curve for cars shifts to the right. 
B) Total revenue increases. 
C) The quantity of cars demanded decreases. 
D) The supply curve for cars shifts to the left.

Quizplus · Accepted Answer

When the price of cars decreases from $24,000 to $20,000, it generally leads to an increase in the quantity of cars demanded, assuming the demand curve remains unchanged. This increase in quantity demanded can lead to an increase in total revenue, especially if the price elasticity of demand is elastic, meaning consumers are very responsive to price changes. Choices A, C, and D describe shifts in demand or supply curves or a decrease in quantity demanded, which are not direct consequences of a price decrease along a given demand curve.

Table 4.2 - Demand Schedule for Automobiles