Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
The demand curve shifts to the left
B
The demand curve shifts to the right
C
The demand curve remains unchanged
D
The demand curve becomes vertical
Understanding the Answer
Let's break down why this is correct
Answer
When consumer income increases, people generally have more money to spend. This usually leads to an increase in demand for normal goods, which are products that people buy more of when they have higher incomes. As a result, the demand curve for these goods shifts to the right, meaning that at every price level, more of the good is demanded than before. For example, if a family’s income rises, they might decide to buy more organic food instead of regular food, demonstrating how higher income can change their purchasing choices. This shift in demand can lead to higher prices and more sales for businesses selling those normal goods.
Detailed Explanation
When people earn more money, they can buy more things. Other options are incorrect because Some might think that more income means less demand; It's a common mistake to think that income changes don't affect demand.
Key Concepts
demand curve
market dynamics
Topic
Market Demand and Equilibrium Changes
Difficulty
medium level question
Cognitive Level
understand
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