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Figure: Predicting Demand Shifts
-(Figure: Predicting Demand Shifts) Which of the following would change demand from D₀ to D₁?

Question

Use the following to answer question Figure: Predicting Demand Shifts -(Figure: Predicting Demand Shifts)Which of the following would change demand from D₀ to D₁?

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An increase in the price of a substitute good would push consumers towards the original good, increasing demand for it. This would result in a shift in demand from D₀ to D₁, as shown in the figure. An increase in consumer income (if this is an inferior good), a change in consumer taste (so that consumers want less of the good), or an increase in the price of a complement would all cause a shift in demand in the opposite direction.

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