Some of the factors outlined below influence consumer demand for a good - Leaving Cert Economics - Question 7 - 2011
Question 7
Some of the factors outlined below influence consumer demand for a good. Write TRUE or FALSE after each of the following sentences.
(i) The price of the good itself... show full transcript
Worked Solution & Example Answer:Some of the factors outlined below influence consumer demand for a good - Leaving Cert Economics - Question 7 - 2011
Step 1
The price of the good itself.
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Answer
TRUE. The price of a good is a fundamental factor affecting its demand. According to the law of demand, as the price decreases, the quantity demanded increases, and vice versa.
Step 2
The cost of producing the good.
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Answer
FALSE. While the cost of production affects supply, it does not directly influence the demand for a good. Demand is more closely related to the price and preferences of consumers.
Step 3
The state of production technology.
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Answer
FALSE. The state of production technology primarily impacts supply rather than demand. Advances in technology can lead to lower production costs, thus affecting the supply curve but not directly shaping consumer demand.
Step 4
The income of the consumer.
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Answer
TRUE. The income of the consumer is a critical factor in determining demand. Generally, as consumer income increases, the demand for normal goods also rises.
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