Multiple Choice
In the context of shifts in the demand curve, what is the relationship between consumers' expectations of future prices and current demand?
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3. The Market Forces of Supply and Demand
Shifts in the Demand Curve
Multiple Choice
Which of the following is a determinant of demand (i.e., a factor that shifts the demand curve) for a normal good?
A
A change in the quantity demanded of the good
B
A change in the amount of the good supplied
C
A change in consumers' income
D
A change in the price of the good itself
Verified step by step guidance1
Understand that a determinant of demand is a factor that causes the entire demand curve to shift either to the right (increase in demand) or to the left (decrease in demand), rather than just causing movement along the curve.
Recall that a change in the quantity demanded refers to movement along the demand curve caused by a change in the price of the good itself, not a shift of the curve.
Recognize that a change in the amount of the good supplied affects the supply curve, not the demand curve, so it is not a determinant of demand.
Identify that a change in consumers' income affects consumers' purchasing power and preferences, which shifts the demand curve for a normal good either rightward (if income increases) or leftward (if income decreases).
Conclude that among the options, only a change in consumers' income is a determinant of demand because it shifts the demand curve for a normal good.
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