An increase in consumer incomes will:

Question

Quizplus · Accepted Answer

An increase in consumer incomes will cause an increase in their purchasing power, leading to a higher demand for normal goods, which are considered to be goods whose demand increases as consumer incomes rise. Conversely, for an inferior good, an increase in consumer incomes would lead to a decrease in demand because consumers would switch to purchasing better-quality goods. Therefore, options A and B are incorrect, while option D is not applicable as it pertains to the supply of a good, which is determined by factors such as production costs and technology rather than consumer incomes.

An Increase in Consumer Incomes Will