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“Petrol is becoming cheaper, yet the demand for cars is not rising”. Does it mean that the law of demand is not operative?
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“Petrol is becoming cheaper, yet the demand for cars is not rising”. D...
¶ Price of petrol and its import on the demand for the cars has nothing to do with the law of demand. Law of demand studies how quantity, demanded of a commodity response in own price of the commodity change in the price, of petrol would leads to a shift in demand curves for the cars. ¶
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“Petrol is becoming cheaper, yet the demand for cars is not rising”. D...
Understanding the Law of Demand
The law of demand states that the quantity of a good demanded decreases as its price increases, all other factors remaining constant. This means that consumers will buy less of a good if its price goes up and will buy more of it if its price goes down.
Factors Affecting Demand
While price is the primary determinant of demand, there are other factors that can influence it, including:
- Income levels
- Availability of substitutes
- Tastes and preferences
- Perceived value of the product
- Marketing and advertising
Explaining the Situation
In the given situation, petrol prices are decreasing, which should theoretically lead to an increase in demand for cars. However, we need to consider the other factors that could be affecting demand. Some possible explanations for why the demand for cars is not rising despite cheaper petrol are:
- COVID-19 pandemic: With many people working from home and travel restrictions in place, the need for cars has decreased.
- Increased use of public transport: Cheaper petrol may not be enough to convince consumers to switch from public transport to cars.
- Environmental concerns: Consumers may be choosing not to buy cars due to concerns about their carbon footprint and the impact on the environment.
- Availability of alternatives: With the rise of ride-sharing services and the popularity of electric bikes, consumers may be choosing these alternatives to cars.
Conclusion
In conclusion, while the law of demand is still operative, it is not the only factor affecting the demand for cars. Cheaper petrol may not be enough to overcome other factors such as changes in consumer behavior, environmental concerns, and the availability of alternatives.
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“Petrol is becoming cheaper, yet the demand for cars is not rising”. Does it mean that the law of demand is not operative?
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“Petrol is becoming cheaper, yet the demand for cars is not rising”. Does it mean that the law of demand is not operative? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about “Petrol is becoming cheaper, yet the demand for cars is not rising”. Does it mean that the law of demand is not operative? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for “Petrol is becoming cheaper, yet the demand for cars is not rising”. Does it mean that the law of demand is not operative?.
“Petrol is becoming cheaper, yet the demand for cars is not rising”. Does it mean that the law of demand is not operative? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about “Petrol is becoming cheaper, yet the demand for cars is not rising”. Does it mean that the law of demand is not operative? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for “Petrol is becoming cheaper, yet the demand for cars is not rising”. Does it mean that the law of demand is not operative?.
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