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Multiple Choice
In microeconomics, the demand for a product is most likely to increase (shift right) because:
A
The product becomes less popular due to a change in tastes.
B
The price of the product rises.
C
Consumers’ incomes rise and the product is a normal good.
D
The price of a complement to the product rises.
Verified step by step guidance
1
Understand that a demand curve shifts to the right (increases) when consumers are willing to buy more of the product at every price level.
Recognize that a change in tastes making the product less popular would decrease demand, shifting the curve to the left, so this does not cause an increase in demand.
Know that a rise in the product's own price causes a movement along the demand curve (a decrease in quantity demanded), not a shift in demand.
Identify that if consumers' incomes rise and the product is a normal good, then demand increases because consumers can afford to buy more, shifting the demand curve to the right.
Understand that if the price of a complement rises, the demand for the product typically decreases because the combined cost of using both goods is higher, shifting demand to the left.