Multiple Choice
Which of the following events could cause a rightward shift in the demand curve for a normal good?
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3. The Market Forces of Supply and Demand
Shifts in the Demand Curve
Multiple Choice
Which of the following would cause the demand curve to shift from point A to point B?
A
A decrease in the price of the good itself
B
A reduction in production costs for suppliers
C
A change in the quantity demanded due to a movement along the curve
D
An increase in consumer income (for a normal good)
Verified step by step guidance1
Understand the difference between a movement along the demand curve and a shift of the demand curve. A movement along the curve happens when the price of the good changes, affecting quantity demanded, while a shift means the entire demand curve moves due to factors other than the good's own price.
Identify that a decrease in the price of the good itself causes a movement along the demand curve, not a shift. This changes quantity demanded but does not shift the curve from point A to point B.
Recognize that a reduction in production costs affects the supply curve, not the demand curve, so it does not cause the demand curve to shift.
Recall that an increase in consumer income for a normal good increases demand at every price level, causing the demand curve to shift to the right, which can be represented as moving from point A to point B on the graph.
Conclude that the correct cause of the demand curve shifting from point A to point B is an increase in consumer income (for a normal good), as this changes demand independently of the good's own price.
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