Question

Ford Motor Company announces that next month it will offer $3,000 rebates on new Mustangs. As a result of this information, today's demand curve for Mustangs will:

1) Shift to the right
2) Shift to the left
3) Remain unchanged
4) Cannot be determined without additional information

Answer 1

When Ford Motor Company announces $3,000 rebates on new Mustangs, the demand curve for Mustangs will shift to the right.

Step-by-step explanation:

The correct answer is 1) Shift to the right. When Ford Motor Company announces $3,000 rebates on new Mustangs, it means that the price of Mustangs will decrease. This lower price will cause an increase in the quantity demanded, resulting in a shift of the demand curve to the right. This shift indicates an increase in demand for Mustangs.