A change in the distribution of income which leaves total income constant will not shift the market demand curve for a product if
A)everyone has an income elasticity of demand of zero for the product.
B)everyone has the same income elasticity of demand for the product.
C)individuals have differing income elasticities for the product,but the average income elasticity for income gainers is equal to the average income elasticity for income losers.
D)any of the above conditions occur.

Question

Quizplus · Accepted Answer

The market demand curve for a product will not shift if the total income remains constant and any of the given conditions (A, B, or C) occurs. This is because each condition ensures that the overall demand for the product does not change despite changes in income distribution. In A, an income elasticity of zero means demand does not change with income. In B, the same income elasticity for everyone means changes in income distribution do not affect overall demand. In C, if the average income elasticity is equal for gainers and losers, the overall demand remains unchanged.

A Change in the Distribution of Income Which Leaves Total