Refer to the above diagram, in which S₁ and D₁ represent the original supply and demand curves and S₂ and D₂ the new curves.In this market the indicated shift in demand may have been caused by:

Question

Quizplus · Accepted Answer

An increase in incomes if the product is a normal good would shift the demand curve to the right, from S₁ to S₂, as consumers now have more purchasing power and are willing to buy more of the product at any given price. A decline in the number of buyers in the market (A) would shift the entire demand curve to the left, not just a section of it. A decline in the price of a substitute good (B) would shift the demand curve of the original product to the left, not the right. An increase in incomes would not cause a shift in demand for an inferior good (D), as consumers would switch to higher-quality substitutes.

Refer to the Above Diagram, in Which S1 and D1

Refer to the Above Diagram, in Which S₁ and D₁