If consumers experience an increase in income, leading to a rise in their purchasing power, which of the following scenarios best describes the impact on the demand curve for a normal good?

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Seekh · Accepted Answer

When consumers’ incomes rise, they can afford more of a normal good, so the quantity demanded at each price level goes up. This causes the entire demand curve to shift outward to the right. The reason is that a higher income increases the consumer’s purchasing power, making the good more attractive. For example, if people earn more and decide to buy more coffee at every price, the coffee market’s demand curve moves to the right.

If consumers experience an increase in income, leading to a rise in their purchasing power, which of the following scenarios best describes the impact on the demand curve for a normal good?

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Deep Dive: Shifts in Demand Curve

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