True or False:If we observe a reduction in the number of cars being purchased, then we should expect this change in demand to lead to a fall in price.
This question is partly true. If the reason why the number of cars being purchased is due to a decrease in demand, then a fall in price is logical. However, the supply curve can shift to the left as well. A leftward shift of the supply curve would raise the price of cars and as a result, fewer cars would be purchased.