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Multiple Choice
Other things held constant, the demand curve will shift when:
A
consumer incomes change
B
quantity demanded changes
C
the supply curve shifts
D
the price of the good changes
Verified step by step guidance
1
Understand the difference between a movement along the demand curve and a shift of the demand curve. A movement along the demand curve occurs when the price of the good changes, affecting the quantity demanded but not shifting the curve itself.
Recognize that a shift in the demand curve means the entire curve moves either to the right (increase in demand) or to the left (decrease in demand), which happens due to factors other than the good's own price.
Identify common factors that cause the demand curve to shift, such as changes in consumer incomes, tastes and preferences, prices of related goods (substitutes or complements), expectations about future prices, and the number of buyers.
Note that a change in consumer incomes affects demand because it changes consumers' purchasing power, leading to a shift in the demand curve either rightward (if income increases for a normal good) or leftward (if income decreases).
Conclude that changes in quantity demanded are movements along the demand curve, supply curve shifts affect supply, and price changes cause movements along the demand curve, so the correct factor causing a demand curve shift here is a change in consumer incomes.