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Chapter 17: Problem 7

Each of the following may lead to a change in the demand for product A except (LO2) a) a change in the price of product \(\mathrm{A}\) b) a change in people's taste for product A c) a change in people's incomes d) a change in the price of product \(B\) (a substitute for product A)

Short Answer

Expert verified
The correct answer is option (a): A change in the price of product A does not lead to a change in the demand for product A, as it only affects the quantity demanded. Options (b), (c), and (d) may lead to a change in the demand for product A due to changes in people's tastes, incomes, or the price of a substitute product.

Step by step solution

01

Option (a): A change in the price of product A

A change in the price of product A will change the quantity demanded but not the demand itself. The demand for a product is actually considered as the entire demand curve while the quantity demanded represents a specific point on the curve. Therefore, option (a) does not lead to a change in the demand for product A.
02

Option (b): A change in people's taste for product A

A change in people's taste for product A will affect its demand. If people prefer product A more, the demand for it increases. Conversely, if people prefer it less, the demand decreases. Thus, option (b) may lead to a change in the demand for product A.
03

Option (c): A change in people's incomes

A change in people's incomes can also affect the demand for product A. If people's income increases, they may be able to afford more of product A and its demand would increase. If their incomes decrease, they may cut back on the purchases of product A, resulting in a decrease in its demand. Therefore, option (c) may lead to a change in the demand for product A.
04

Option (d): A change in the price of product B (a substitute for product A)

A change in the price of product B, which is a substitute for product A, can influence the demand for product A. If the price of product B increases, people might switch to product A due to its lower price, resulting in an increase in product A's demand. Conversely, if the price of product B decreases, people might choose product B over product A, leading to a decrease in product A's demand. Hence, option (d) may lead to a change in the demand for product A. Based on the analysis, the correct answer is: Option (a): A change in the price of product A does not lead to a change in the demand for product A.

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Most popular questions from this chapter

Which statement is true? (LO1, 2, 4) a) A change in demand is the same thing as a change in the quantity demanded. b) The supply curve moves upward to the left. c) The law of demand is no longer valid. d) A rise in income will increase the demand for normal goods.

An increase in the supply of running shoes willassuming demand is unchanged- lead to (LO7) a) an increase in equilibrium price and an increase in equilibrium quantity b) a decrease in equilibrium price and a decrease in equilibrium quantity c) an increase in equilibrium price and a decrease in equilibrium quantity d) a decrease in equilibrium price and an increase in equilibrium quantity

A decrease in supply can be brought about by (LO5) a) a price increase b) a price decrease c) a random event like a hurricane or an earthquake d) a change in consumers' tastes or preferences

A decrease in demand means that the quantity demanded - \((\mathrm{LO} 2)\) a) does not fall at any price b) falls only at the equilibrium price c) falls at a few prices d) falls at most prices e) falls at all prices

The American Cancer Society announces the results of a study of 10,000 smokers and nonsmokers. A 21 -year-old smoker who continues smoking two packs a day has a life-time expectancy that is 20 years shorter than a 21 -year-old nonsmoker. As a result of this announcement, the cigarette equilibrium (LO3) a) price will rise and quantity sold will rise b) price will rise and quantity sold will fall c) price will fall and quantity sold will fall d) price will fall and quantity sold will rise
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