which of the following factors will not lead to a decrease in demand for a good?
A) an increase in the price
B) a decrease in the price of substitute products
C) An unsuccessful advertising campaign for the good
C) a decrease in the consumer incomes
I think it is B, but the book says A. Could some please help me.
Make absolutely SURE you have copied the question correctly. It is trickier if it is negative. In my opinion:
A. WILL lead to a decrease in demand
B. This will too because people will buy the less expensive product
C. As far as I'm concerned, it is C. Many people ignore the advertising, although if they see a bad ad, they will probably want the product less.
The 2nd C must be D? If the consumers have less money, there will be less demand.
But the question does say "what WILL lead to a decrease" BUT "what will NOT."
Sra
To determine which factor will not lead to a decrease in demand for a good, let's analyze each option:
A) An increase in the price: Generally, an increase in price leads to a decrease in demand for a good. When the price rises, consumers tend to purchase less of the good, especially if they have other alternatives available.
B) A decrease in the price of substitute products: A decrease in the price of substitute products typically leads to a decrease in demand for the original good. Consumers may switch to the less expensive substitute instead.
C) An unsuccessful advertising campaign for the good: An unsuccessful advertising campaign can potentially decrease the demand for a good. If consumers are not aware of the product or its benefits due to poor advertising, they may choose not to purchase it.
D) A decrease in consumer incomes: A decrease in consumer incomes potentially leads to a decrease in demand. When individuals have limited income, they may prioritize essential goods over non-essential ones, reducing their demand for the latter.
Considering the above analysis, the factor that will not lead to a decrease in demand for a good is option A - an increase in the price. When the price increases, demand for the good generally decreases. It is important to note that the demand curve is downward sloping - when prices rise, demand falls, and when prices fall, demand rises.
If your book states that option A is the correct answer, then it might be helpful to review the concept of demand and the relationship between price and demand, as it appears to be a key concept in this question.