Managerial Economicsintermediate
A rise in a product's own price, with other relevant conditions unchanged, normally causes which change?
Answer
A movement along the demand curve, with quantity demanded falling
Explanation
### Why this is right
The product’s own price determines a movement along its demand curve. Under the law of demand, quantity demanded generally falls as own price rises, assuming other relevant conditions remain unchanged.
### The concept
A demand-curve shift occurs when a non-price determinant changes, such as income, tastes, or the price of a related good. Do not confuse a change in quantity demanded, which is movement along the curve, with a change in demand, which shifts the whole curve.
### The other options
- **A rightward shift of the demand curve**: this generally follows a favorable change in a demand determinant, not merely a change in own price.
- **A leftward shift of the supply curve**: this concerns sellers and supply determinants.
- **An increase in market demand**: this means the curve shifts right; it is not the normal result of an own-price rise.
### Remember
Own price moves you along demand; other demand determinants shift demand.
Related Questions
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