Multiple Choice
Which of the following would cause the demand curve for a good to shift from point A to point B?
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3. The Market Forces of Supply and Demand
Shifts in the Demand Curve
Multiple Choice
When consumers' income increases, what typically happens to the demand curve for a normal good?
A
The demand curve shifts to the right.
B
The demand curve shifts to the left.
C
There is movement along the demand curve.
D
The demand curve becomes vertical.
Verified step by step guidance1
Understand the definition of a normal good: A normal good is one for which demand increases as consumer income increases.
Recall the relationship between income changes and demand: When income rises, consumers generally buy more of normal goods, increasing the quantity demanded at every price level.
Analyze the effect on the demand curve: Since demand increases at all prices, the entire demand curve shifts to the right, indicating higher quantity demanded for each price.
Distinguish between a shift in the demand curve and movement along the curve: A movement along the demand curve happens only when the price of the good changes, not when income changes.
Conclude that for a normal good, an increase in income causes the demand curve to shift to the right, reflecting increased demand at all prices.
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