📚 Learning Guide
Supply and Demand Analysis
easy

What happens to the demand for a product when consumer income increases, assuming the product is a normal good?

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Learning Path
Learning Path

Question & Answer
1
Understand Question
2
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3
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4
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Choose the Best Answer

A

Demand increases

B

Demand decreases

C

Demand remains constant

D

Demand becomes elastic

Understanding the Answer

Let's break down why this is correct

Answer

When consumer income increases, the demand for a normal good typically goes up. A normal good is something that people buy more of when they have more money to spend. For example, if people start earning higher salaries, they might choose to buy more organic food instead of regular food because they can afford it. This increase in demand means that more people want to buy the good at the same price, which can lead to higher sales for the company that makes it. So, when income rises, consumers feel more comfortable spending, and they often buy more of the normal goods they enjoy.

Detailed Explanation

When people earn more money, they can buy more things. Other options are incorrect because Some might think that higher income means less demand; It's a common mistake to think that income changes don't affect demand.

Key Concepts

demand
Topic

Supply and Demand Analysis

Difficulty

easy level question

Cognitive Level

understand

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