Only 1
Both 1 and 3
Both 3 and 4
All of the above
Answer is Right!
Answer is Wrong!
The correct answer is D. All of the above.
Market demand for any good is a function of the following factors:
- Price per unit of the good: The higher the price of a good, the less people will demand it. This is because people have limited budgets and will have to choose between buying different goods.
- Price per unit of other goods: The prices of other goods can affect the demand for a good in two ways. First, if the price of a substitute good (a good that can be used in place of another good) goes up, the demand for the good will increase. This is because people will switch to buying the good that is now relatively cheaper. Second, if the price of a complementary good (a good that is used together with another good) goes up, the demand for the good will decrease. This is because people will have less money to spend on the good that they want to buy.
- Incomes of consumers: The higher the incomes of consumers, the more they will demand of all goods. This is because they will have more money to spend.
- Tastes of consumers: The tastes of consumers can also affect the demand for a good. If people’s tastes change in favor of a good, the demand for the good will increase. Conversely, if people’s tastes change away from a good, the demand for the good will decrease.
It is important to note that these are just some of the factors that can affect the demand for a good. Other factors, such as the availability of substitutes and complements, the expected future price of the good, and the number of buyers in the market, can also affect demand.