Rising demand for motor homes is most likely caused by which of the following?

• A. A decrease in the price of motor homes
• B. A decrease in population
• C. An increase in consumer incomes
• D. A rise in the price of gasoline

Answer: (C)

Verified step by step guidance

1. Understand the concept of demand in microeconomics: Demand refers to the quantity of a good or service that consumers are willing and able to purchase at various prices, holding other factors constant.
2. Recall the factors that cause a shift in the demand curve (change in demand), which include changes in consumer income, tastes and preferences, prices of related goods, expectations, and population.
3. Analyze each option to determine if it causes a movement along the demand curve or a shift of the demand curve: A decrease in the price of motor homes causes a movement along the demand curve (change in quantity demanded), not a shift in demand.
4. A decrease in population would likely decrease demand, shifting the demand curve to the left, so it does not explain rising demand.
5. An increase in consumer incomes typically increases demand for normal goods like motor homes, shifting the demand curve to the right, which explains rising demand; a rise in the price of gasoline, a complementary good, would likely decrease demand for motor homes.