Multiple Choice
When consumers' income increases, what typically happens to 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
A change in all of the following variables will change the market demand for a product except:
A
Consumer tastes and preferences
B
Prices of related goods
C
Consumer income
D
The price of the product itself
Verified step by step guidance1
Understand the difference between 'market demand' and 'quantity demanded'. Market demand refers to the total demand for a product at various prices, while quantity demanded refers to the amount consumers want to buy at a specific price.
Recall that a change in the price of the product itself causes a movement along the demand curve, which changes the quantity demanded, not the demand curve itself.
Identify factors that shift the demand curve (market demand) such as consumer tastes and preferences, prices of related goods (substitutes or complements), and consumer income. These factors change demand at every price level.
Recognize that changes in the price of the product cause movements along the existing demand curve rather than shifting the demand curve, so they do not change market demand.
Conclude that among the options given, the price of the product itself does not change market demand but changes quantity demanded, which is why it is the correct answer.
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