Which of the following factors most directly affects the demand for automobiles?

• A. The cost of steel used in manufacturing
• B. The interest rate charged to car manufacturers
• C. The income level of consumers
• D. The supply of automobile mechanics

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the difference between demand and supply factors. Demand factors influence consumers' willingness and ability to buy a product, while supply factors affect producers' ability to supply the product.
2. Step 2: Analyze each option to determine if it affects demand or supply. For example, the cost of steel and interest rates charged to manufacturers are related to production costs, which influence supply, not demand.
3. Step 3: Recognize that the income level of consumers directly affects their purchasing power and willingness to buy automobiles, which is a key determinant of demand.
4. Step 4: Consider that the supply of automobile mechanics is related to the service market and does not directly influence the demand for new automobiles.
5. Step 5: Conclude that among the options, the income level of consumers most directly affects the demand for automobiles because it changes consumers' ability to purchase cars.