An increase in the price of a luxury item will cause its demand curve to shift to the left.

Question

Quizplus · Accepted Answer

An increase in the price of a luxury item does not cause its demand curve to shift; instead, it causes a movement along the demand curve to a lower quantity demanded. A shift in the demand curve would be caused by factors other than price, such as changes in consumer preferences, income, or the prices of related goods.

An Increase in the Price of a Luxury Item Will