Which of the following events would cause a rightward shift of the demand curve for cups of coffee?

• A. An increase in consumer income, assuming coffee is a normal good
• B. A decrease in the population of coffee drinkers
• C. A decrease in the price of tea, a substitute for coffee
• D. A decrease in the price of coffee

Answer: (A)

Verified step by step guidance

1. Understand what causes a demand curve to shift: A demand curve shifts when there is a change in a non-price determinant of demand, such as income, tastes, prices of related goods, or population.
2. Identify the effect of an increase in consumer income on demand for a normal good: For a normal good, an increase in income leads to an increase in demand, causing the demand curve to shift rightward.
3. Analyze the impact of a decrease in the population of coffee drinkers: A smaller population reduces the number of buyers, which decreases demand and shifts the demand curve leftward, not rightward.
4. Consider the effect of a decrease in the price of tea, a substitute for coffee: When the price of a substitute good falls, consumers tend to buy more of the substitute and less of the original good, causing the demand for coffee to decrease and the demand curve to shift leftward.
5. Evaluate the effect of a decrease in the price of coffee itself: A change in the price of coffee causes a movement along the demand curve (change in quantity demanded), not a shift of the demand curve.