Refer to Figure 26-2. Which of the following events would shift the demand curve from D1 to D2?

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

Answer: (B)

Verified step by step guidance

1. Understand that a shift in the demand curve means a change in demand at every price, not just a movement along the curve caused by a price change of the good itself.
2. Recall that factors causing a demand curve to shift include changes in consumer income, prices of related goods (substitutes and complements), consumer preferences, and population.
3. Identify that a decrease in the price of the good itself causes a movement along the demand curve, not a shift, so this option does not shift the curve from D1 to D2.
4. Recognize that a decrease in the price of a substitute good would typically decrease demand for the original good, shifting the demand curve leftward, not rightward from D1 to D2.
5. Understand that an increase in consumer income, assuming the good is normal, increases demand at every price, shifting the demand curve rightward from D1 to D2.