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 demand at every price level is indicated by a shift to the right in the demand curve. This shift could be caused by an increase in incomes, especially if the product is a normal good, which means that as income increases, demand for the product also increases. A decline in the number of buyers in the market (option A) or a decline in the price of a substitute good (option B) would cause a shift to the left in the demand curve, representing a decrease in demand at every price level. An increase in incomes would not cause a shift to the left in the demand curve (option D) because it would still lead to an increase in demand at every price level.

Refer to the Above Diagram, in Which S1 and D1

Refer to the Above Diagram, in Which S₁ and D₁