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A change in____ all else held constant, generates a change in quantity demanded.

1) income
2) price of a substitute
3) price
4) taste

User Dfortun
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Final answer:

The answer is price; a change in the price of a product, holding all else constant, leads to a change in quantity demanded. This includes both the substitution effect and the income effect, where consumers adjust their purchasing decisions based on relative cost and increased purchasing power, respectively.

Step-by-step explanation:

The student's question revolves around the factors that influence the quantity demanded for a product or service, with a particular focus on what would instigate a change in quantity demanded while all other factors remain constant. The answer to this question is the price of the product itself. When there is a change in price, and nothing else changes, there is a corresponding movement along the demand curve, known as a change in the quantity demanded. This occurs due to two main effects: the substitution effect, where consumers opt for a cheaper alternative when the price of a product decreases, and the income effect, where a price decrease effectively increases consumers' purchasing power, allowing them to buy more with the same amount of money.

If we were to consider options 1), 2), and 4) from the list provided by the student (income, price of a substitute, and taste), these would cause a shift in the demand curve rather than a movement along the demand curve. That's because these factors affect the demand as a whole, changing the quantity demanded at every price level. Hence, they do not represent a change in quantity demanded due to the price of the product; instead, they result in a new demand curve.

User Valerio Emanuele
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