Factors Affecting Demand Curves Quiz

Cost of production affects supply, not demand.

As smartphones become cheaper, more people buy them, thus increasing the demand for related accessories like smartphone cases.

The number of sellers affects supply, not demand.

An increase in the price of coffee typically leads consumers to substitute tea, increasing its demand.

Higher consumer income typically leads to increased demand for luxury goods.

A decrease in consumer income for a normal good decreases demand, shifting the curve leftward.

Consumer preferences may influence demand but are not a direct factor in determining price elasticity.

A shift in the demand curve indicates a change in demand at all price levels, not just one.

Elasticity of demand measures how sensitive quantity demanded is to changes in price.

Supply elasticity is a measure of how responsive supply is to changes in price, not demand.

Perfectly elastic demand means consumers are willing to buy any quantity at a specific price, and changes in price do not affect quantity demanded.

A positive cross-price elasticity indicates that as the price of one good increases, the demand for the other increases, indicating they are substitutes.