📚 Learning Guide
Market Demand and Equilibrium Changes
easy

What effect does an increase in consumer income have on the demand curve for a normal good?

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Learning Path
Learning Path

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Choose 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, which can lead to an increase in demand for normal goods. Normal goods are items that people buy more of when they have more income, like new clothes or dining out at restaurants. As demand increases, the demand curve shifts to the right, meaning that at every price level, consumers are willing to buy more of the good than before. For example, if a person's income rises and they decide to buy more organic fruits because they can afford them, this increase in demand will raise the overall quantity of organic fruits sold at various prices. Therefore, the increase in income positively affects the demand curve for normal goods by shifting it to the right.

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

market dynamics
Topic

Market Demand and Equilibrium Changes

Difficulty

easy level question

Cognitive Level

understand

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