Question

A change in which of the following does not cause a change in demand?

• A. Change in price
• B. Change in income
• C. Changes in taste and fashion
• D. None of these

Hint:

A change in the price of a good results in a movement along the demand curve, while changes in income or consumer preferences shift the demand curve itself.

Answer 1

The Correct Option is A

Step 1: Understanding Demand:
Demand refers to the quantity of a good or service that consumers are willing to purchase at different prices. Several factors can affect demand, including price, income, and consumer preferences. However, a change in price does not directly cause a change in demand. Instead, it leads to a change in the quantity demanded, which is different from a change in demand.
Step 2: Analyzing the Options:
- Change in Price: A change in price causes a movement along the demand curve (a change in quantity demanded), but does not shift the demand curve itself. Therefore, it does not cause a change in demand.
- Change in Income: An increase in income generally leads to an increase in demand for most goods (normal goods), shifting the demand curve to the right.
- Changes in Taste and Fashion: If consumers prefer a product more (for example, due to a trend or a new advertisement), demand increases, shifting the demand curve to the right.
Step 3: Conclusion and Answer:
The correct answer is (A) because a change in price leads to a change in quantity demanded, not in demand itself.