CA Foundation · Business Economics · Theory of Demand and Supply
Which of the following will cause a movement along the demand curve for scooters, rather than a shift of the curve, other things remaining equal?
A fall in the price of scooters causes a movement along the demand curve (an extension of demand). Changes in income, the price of related goods such as petrol, and tastes are non-price determinants, and they shift the entire demand curve instead.
- AA fall in the price of scootersCorrect
- BA rise in consumers' incomes
- CA fall in the price of petrol, a complementary good
- DA change in consumers' tastes in favour of scooters
Explanation
A change in the good's own price changes the quantity demanded and moves the consumer along the same demand curve. Income, the price of related goods and tastes are determinants of demand other than own price, so a change in any of them shifts the whole curve.
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