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In 2013 BusinessWeek Online reported that car sales in China had slowed and some car prices had dropped. The price cuts had had the unintended result of consumers waiting for deeper discounts. How does this waiting suggest about supply and demand?
A) The demand curve slopes the wrong way because price cuts have lead to smaller sales.
B) If buyers are buying less when price falls, the supply curve must have moved left.
C) If buyers are buying less when price falls, the supply curve must have moved right.
D) Price cuts have changed buyers' expectations, and the change in expectations has moved the demand curve left.
Picking a letter is not a satisfactory answer. Please explain your choice. (Do not add to the story)
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