ECONOMICS
DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Restaurant visits drop after a hurricane causes a city to be evacuated.
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A computer chip maker moves to a town and hires hundreds.
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After a team wins the World Series, it becomes a fad to buy their caps.
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Sales of potato chips drop after the price of pretzels falls by half.
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Detailed explanation-1: -Market size can especially cause a demand curve to shift if the product or service in question is a “need” and not just a “want.” For example, a necessity such as soap may experience heightened demand during population increases simply because more people are buying the non-discretionary item.
Detailed explanation-2: -Market factors affecting demand of consumer goods. The demand for a good increases or decreases depending on several factors. This includes the product’s price, perceived quality, advertising spend, consumer income, consumer confidence, and changes in taste and fashion.
Detailed explanation-3: -For example, if the price of a computer is expected to fall next month, the demand for computers today decreases. The greater the number of buyers in a market, the larger is the demand for any good. When preferences change, the demand for one item increases and the demand for another item (or items) decreases.
Detailed explanation-4: -A change in market size affects demand because if the number of consumers increases or decreases, the demand curve will shift to account for the larger or smaller consumer base.