Question 21
MediumOriginal questionThe demand curve moves from D to D₁ as shown. Which event could cause this for a normal good?
Show the answer and explanation
CorrectNot quiteAnswer B
Correct answer: B
Explanation
At ₹6, demand rises from 30 to 50: more is demanded at the same price, so demand has increased.
For a normal good, a rise in income does this. A cheaper substitute or a dearer complement would shift it left.
Worth noting
A fall in the good's own price is a movement along D, not a shift to D₁.
- Concept
- Cause of an increase in demand
- Typical timeTypical
- 70 s
- Your timeYours
- —
Practise this chapter →
Ten questions from Demand & Its Determinants, at your own pace.