Question

Identify an example of a non-price determinant for fuel-efficient cars that might cause a demand shift to the right. Identify another example that might cause a shift to the left.

Answer 1

The demand curve represents the total amount of consumers of a good or service, in this case, cars. As consumption per car increases, the demand curve shifts to the right on the graph. When consumption decreases, the demand curve shifts to the left.

Shifts together are associated with aggregate economic events. For example, a significant drop in gasoline prices would increase demand for the car, causing the demand curve to shift to the right.

However, if automakers announced that an even more economical electric car would be launched and popularized, consumers would decrease fuel consumption car by pulling the left-leaning demand curve.

Answer 2

A change in price causes a Movement along the Demand Curve. demand- ... A shift to the right in the demand curve can occur for a number of reasons: ... For example, higher spending on advertising by Coca Cola has increased global sales. ... For some luxury goods income will be an important determinant of demand.