Which of the following is an economic factor affecting the demand for wine?

• A. changes in consumption habits
• B. laws prohibiting sale of alcohol
• C. strength of the economy
• D. area under vine

Answer: (C)

Economic conditions influence demand by affecting purchasing power and consumer confidence. When the economy is strong, people generally have more disposable income and are more willing to spend on wine, including higher-priced options, which increases demand. In a weaker economy, tighter budgets and concerns about jobs tend to reduce discretionary spending, lowering demand. The option that reflects this macroeconomic influence is the strength of the economy.

The other factors describe non-economic or supply-side influences: changes in consumption habits relate to tastes and preferences; laws prohibiting the sale of alcohol are regulatory constraints; area under vine affects how much wine can be produced, which is a supply issue rather than a direct demand factor.