Refer to the 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

The shift in demand from D1 to D2 suggests that there has been an increase in demand for the product. An increase in income would cause a person to have more disposable income, which could lead to an increase in demand for normal goods. Therefore, choice C is the best answer. A decline in the number of buyers in the market (choice A) would shift the demand curve to the left, not to the right. A decline in the price of a substitute good (choice B) would shift the demand curve for the original good to the left, not to the right. An increase in incomes if the product is an inferior good (choice D) would actually cause a decrease in demand for that product, so it is not the best answer.

Refer to the Diagram, in Which S1 and D1 Represent