Question

All of the following would decrease demand for furry boots except: A. the price of shoes goes down. B. people prefer boots without fur. C. the price of furry boots goes up. D. people expect the boots to go out of style soon. E. a very warm winter has been forecasted.

Answer 1

Answer:

The correct answer is:

the price of shoes goes down. (A)

Explanation:

The most important determinant of demand is price. An increase in price without accompanying income to the consumer leads to a reduction in demand because more money is needed to purchase a unit of the product hence to make up for the change, the quantity demanded (purchased) reduces. On the other hand, if the price reduces, the consumer spends lesser for the same units of product, therefore he/she can afford more quantity with the same price, hence demand increases. Therefore if the price of furry boots go down, the quantity demanded increases.