Ceteris paribus,which of the following would generally cause an increase in the demand curve for new automobiles?
A)A decrease in the price of new automobiles.
B)An increase in consumers' income.
C)The new models being perceived as ugly compared with old models.
D)Consumer expectations that the price of new automobiles will be lower next year.

Question

Quizplus · Accepted Answer

An increase in consumers' income would generally cause an increase in the demand for new automobiles, as consumers would have more purchasing power to buy new cars. A decrease in the price of new automobiles (choice A) would cause a movement along the demand curve, but not necessarily an increase in demand. The perception of new models as ugly (choice C) would likely decrease demand for new automobiles. Consumer expectations of lower prices in the future (choice D) would also likely decrease current demand, as consumers may delay their purchasing decisions in anticipation of lower prices.

Ceteris Paribus,which of the Following Would Generally Cause an Increase