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What do economists call a situation in which consumers buy a different quantity than they did before, at every price?

a. a change in demand
b. a move along the demand curve
c. a shift in size of the demand curve
d. a change in expectations

User Kal Zekdor
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1 Answer

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Final answer:

A situation where consumers buy a different quantity at every price is known as a change in demand, which results in a new demand curve. Factors such as income, preferences, the prices of related goods, and expectations about future prices can cause the demand curve to shift either to the right or left. Therefore, the correct option is A.

Step-by-step explanation:

Economists refer to a situation where consumers buy a different quantity than before at every price as a change in demand. This is not merely a movement along the same demand curve due to a change in the price of the good itself but is represented by a new demand curve entirely. Such a shift could be to the left or to the right of the original demand curve and occurs for various reasons such as a change in income levels, tastes and preferences, the price of related goods, or consumer expectations about future prices.

For example, if people's income increases, they might start buying more of a product, shifting the demand curve to the right. This scenario indicates that at every price point, the quantity demanded has increased. Similarly, if a famous athlete endorses a product, it may lead to an enhanced preference for the product, resulting in an increased demand at every price, again shifting the demand curve to the right. Moreover, changes in expectations about future prices can cause a demand shift. If consumers expect prices to rise in the future, they may purchase more now, shifting the demand curve to the right. Conversely, if the price of a complement good increases, the demand for the related good could decrease, shifting its demand curve to the left.

User Pranjal Successena
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