Which of the following would cause the demand curve for automobiles to shift to the left?
A. an increase in the price of the automobiles B. an increase in the interest rate paid to borrow money to pay for the automobile C. an increase in buyers' incomes D. an increase in the cost of production of automobiles E. none of the above
Correct Answer: B
Explanation
Shift in demand is caused by change in factors that affect demand other than the price of the commodity. While a change in the price of the commodity cause a change in the quantity demanded (which is along a single demand curve), change in other factors cause a shift in the demand curve from one position to another. Meanwhile, leftward shift of the demand curve indicates that there is decrease in the factor that has a positive relationship with the demand curve and vice versa.
