You have decided to purchase a new Range Rover SUV. A friend tells you that Land Rover will be offering a $3000 rebate on Range Rovers starting next month. As a result of this information, what will happen to your demand curve for Range Rovers?

Question

Quizplus · Accepted Answer

The $3000 rebate will decrease the cost of purchasing a Range Rover, which will lead to an increase in quantity demanded. This will shift the demand curve to the right today. However, since the rebate is only available next month, consumers may postpone their purchases until then, leading to a leftward shift in today's demand curve. Therefore, the demand curve will shift left today.

You Have Decided to Purchase a New Range Rover SUV