Multiple Choice
Which of the following is most likely to shift the demand curve for coffee to the right (increase demand), holding the price of coffee constant?
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3. The Market Forces of Supply and Demand
Shifts in the Demand Curve
Multiple Choice
Which of the following changes would shift the demand curve for coffee to the right (increase demand), holding the price of coffee constant?
A
A decrease in consumer income, assuming coffee is a normal good
B
An increase in the price of coffee
C
An increase in the price of tea, assuming tea is a complement to coffee
D
An increase in consumer income, assuming coffee is a normal good
Verified step by step guidance1
Understand that a demand curve shifts when factors other than the good's own price change, such as income, prices of related goods, tastes, or expectations.
Recall that for a normal good, an increase in consumer income leads to an increase in demand, shifting the demand curve to the right.
Recognize that a decrease in consumer income would decrease demand for a normal good, shifting the demand curve to the left, so this does not increase demand.
Know that an increase in the price of the good itself (coffee) causes a movement along the demand curve, not a shift of the demand curve.
Understand that if tea is a complement to coffee, an increase in the price of tea would decrease the demand for coffee, shifting the demand curve to the left, not to the right.
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