Certified Financial Planner (CFP) Exam 2026 – 400 Free Practice Questions to Pass the Exam

The reasoning behind selecting the option that includes all statements is based on the understanding that consumer demand is influenced by multiple factors.

Firstly, changes in consumer preferences are a primary driver of demand. As tastes and trends evolve, consumers may be more or less inclined to purchase certain goods or services, leading to fluctuations in demand levels.

Secondly, variations in consumer income also significantly affect demand. When consumers experience an increase in income, they often have more purchasing power, which can lead to higher demand for various products. Conversely, if incomes drop, demand may decrease as consumers cut back on spending.

Lastly, the price of related goods, including substitutes and complements, plays a crucial role in shaping consumer demand. When the price of a substitute good rises, consumers may shift their demand to a relatively cheaper alternative. Similarly, if the price of a complementary good increases, the demand for the original product may decline, as these goods are often purchased together.

Together, these factors create a comprehensive view of how demand can shift, making the choice that includes all statements accurate in explaining the complexities of changes in consumer demand.