Demand and Supply Shifts

What does a shift to the right in the demand curve for a product indicate?

• A decrease in consumer demand for the product

• An increase in the price of the product

• An increase in consumer demand for the product

• A decrease in the price of the product

Which of the following would cause a shift to the right in the supply curve for a product?

• An increase in the price of raw materials

• A technological advancement in production

• An increase in taxes on the product

• A decrease in the number of producers

What does a horizontal demand curve imply about the price elasticity of demand for a product?

• The product is a necessity with no close substitutes.

• The product has many close substitutes.

• Consumers are perfectly price elastic.

• Consumers are perfectly price inelastic.

A vertical supply curve suggests that:

• The quantity supplied is sensitive to changes in price.

• The quantity supplied is not affected by changes in price.

• Suppliers can increase production at no additional cost.

• Suppliers' production capacity is fully flexible.

Which of the following scenarios would most likely cause a vertical demand curve for a product?

• The product is considered a luxury item.

• The product has many close substitutes available in the market.

• The product is an essential good with no close substitutes.

• The product's demand is highly sensitive to changes in income.