Question

Which of the following leads to a leftward shift of the demand curve? An expectation of...

Which of the following leads to a leftward shift of the demand curve?

An expectation of a decline in the product price in the future
A decrease in the good's own price
An increase in the price of a substitute
A decrease in the price of a complement
An increase in the number of consumers

Homework Answers

Answer #1

Option 1. An expectation of a decline in the product price in the future

Explanation: Demand curve shifts to the left when demand falls due to factors other than the price. When demand falls due to an increase in price, there is a downward movement along the demand curve rather than a shift of the demand curve.

When people expect the price to tall in the future, they consume less at present and demand less amount of goods and services at present. So, there will be a fall in demand caused by factors other than price at present. So, the demand curve would shift towards the left.

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