All else equal, anything that increases the transportation costs _____the number of consumers shopping at_____ .
A)increases; larger, less expensive stores
B)does not change; larger, less expensive stores
C)increases; local, more expensive stores
D)does not change; local, more expensive stores

Question

Quizplus · Accepted Answer

According to the law of demand, an increase in transportation costs will typically lead to a decrease in demand for goods. In this case, if transportation costs increase, consumers are likely to opt for shopping at stores that are closer to their location (i.e. local stores) even if the prices are higher. Therefore, an increase in transportation costs would increase the number of consumers shopping at local, more expensive stores.

All Else Equal, Anything That Increases the Transportation Costs _____The