Which of the following scenarios would lead to an increase in the demand for a product?

Get more with Examzify Plus

Remove ads, unlock favorites, save progress, and access premium tools across devices.

FavoritesSave progressAd-free
From $9.99Learn more

Prepare for the EPF Standard Essentials Test with comprehensive multiple choice questions and flashcards. Each question comes with detailed explanations and hints to help you succeed. Start your journey to passing your exam today!

An increase in consumer income typically leads to a higher demand for products, especially normal goods, which are those goods for which demand increases as consumer income rises. When consumers have more disposable income, they are generally willing to spend more on various products, which drives up demand. This can result in increased sales for businesses, allowing them to meet the growing interest in their offerings.

In contrast, a fall in consumer income would likely reduce demand, as consumers may not be able to afford certain products. Similarly, an increase in the price of a complementary good may lead to a decrease in demand for the related product, as higher prices often discourage purchase. Lastly, a decrease in the number of consumers directly reduces the potential market size, which would likely lead to a drop in demand for that product overall.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy