Which of the following increases the demand for a good?
A) a rise in the price of a complement
B) the expectation that future income will be higher
C) an increase in income, assuming the good is an inferior good
D) a decrease in the number of buyers
E) a fall in the price of a substitute

Question

Quizplus · Accepted Answer

An expectation of higher future income will increase consumer confidence and willingness to spend more money, which in turn increases the demand for goods.

Answer: C 
 An increase in income may lead to a decrease in demand for inferior goods, but may also lead to an increase in demand for normal goods, as consumers have more disposable income to spend.

Answer: E 
 A fall in the price of a substitute good makes it less expensive relative to the good in question, thereby increasing the demand for the good.

Which of the Following Increases the Demand for a Good