Learning Path
Question & Answer
Choose the Best Answer
Increase in consumer income
Decrease in the price of the product
Change in consumer tastes towards the product
Increase in the price of a complementary good
Increase in the number of consumers in the market
Understanding the Answer
Let's break down why this is correct
When people earn more money, they can buy more of a normal good, so the whole demand curve moves to the right. Other options are incorrect because Lowering the product’s own price does not change the willingness to buy at each price; it only causes a movement down the existing demand curve.
Key Concepts
Shifts in Demand Curve
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Deep Dive: Shifts in Demand Curve
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Definition
Shifts in the demand curve occur when factors other than price influence the quantity of a product demanded at each price level. Changes in consumer income, tastes, fashion trends, and prices of related goods can shift the demand curve either outward (increase in demand) or inward (decrease in demand).
Topic Definition
Shifts in the demand curve occur when factors other than price influence the quantity of a product demanded at each price level. Changes in consumer income, tastes, fashion trends, and prices of related goods can shift the demand curve either outward (increase in demand) or inward (decrease in demand).
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