consumers can afford to buy (assuming price, and anything else that affects demand, is unchanged). This is what the

ceteris paribusassumption really means. In this particular case, after we analyze each factor separately, we can

combine the results. The amount consumers buy falls for two reasons: first because of the higher price and second

because of the lower income.

How Does Income Affect Demand?

Let’s use income as an example of how factors other than price affect demand. Figure 3.5 shows the initial
demand for automobiles as D0. At point Q, for example, if the price is $20,000 per car, the quantity of cars
demanded is 18 million. D0 also shows how the quantity of cars demanded would change as a result of a higher
or lower price. For example, if the price of a car rose to $22,000, the quantity demanded would decrease to 17

million, at point R.
{"producer": "Prince 14.2 (www.princexml.com)", "file_type": ".pdf", "title": "Principles of Microeconomics 3e", "batch_upload": true, "creator": "PDFMiner", "upload_timestamp": "2026-02-07T15:24:38.309401", "file_name": "Microeconomics3e.pdf", "source": "downloads\\business\\economics\\Microeconomics3e.pdf", "creationdate": "2022-12-07T14:15:44-06:00", "total_pages": 597, "uploaded_via": "batch_uploader", "moddate": "2022-12-07T14:23:05-06:00", "file_size_mb": 26.99, "source_file": "downloads\\business\\economics\\Microeconomics3e.pdf", "file_hash": "830b81f41611ac67a490444dbb5d6aed292224606965b06965b914443c93331a"}