Multiple Choice
Which of the following is a determinant of demand that would cause the demand for a good to increase?
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4. Elasticity
Determinants of Price Elasticity of Demand
Multiple Choice
Which of the following is most directly affected by a change in the number of buyers in a market?
A
Market demand
B
Price elasticity of demand
C
Consumer surplus
D
Market supply
Verified step by step guidance1
Step 1: Understand the concept of 'number of buyers' in a market. The number of buyers refers to how many consumers are willing and able to purchase a good or service at various prices.
Step 2: Recall that market demand is the total quantity demanded by all buyers in the market at each price level. Therefore, a change in the number of buyers directly affects the market demand curve by shifting it.
Step 3: Consider price elasticity of demand, which measures how quantity demanded responds to a change in price for a given good. This elasticity depends on consumer preferences and availability of substitutes, not directly on the number of buyers.
Step 4: Consumer surplus is the difference between what consumers are willing to pay and what they actually pay. While it can be influenced by demand changes, it is not the most direct effect of a change in the number of buyers.
Step 5: Market supply represents the total quantity sellers are willing to sell at each price. It is determined by producers and is not directly affected by the number of buyers.
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