When considering factors that shift demand curves, which of the following will increase demand?

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

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the concept of a demand curve and what causes it to shift. A demand curve shows the relationship between the price of a good and the quantity demanded. A shift in the demand curve means that at every price, the quantity demanded changes due to factors other than the good's own price.
2. Step 2: Identify the factors that can shift the demand curve. These include changes in consumer income, prices of related goods (substitutes and complements), consumer preferences, and population size.
3. Step 3: Analyze how an increase in consumer income affects demand for a normal good. For normal goods, demand increases as consumer income rises, shifting the demand curve to the right.
4. Step 4: Consider the effect of a decrease in consumer population. A smaller population generally reduces the number of buyers, shifting the demand curve to the left (decreasing demand).
5. Step 5: Evaluate the impact of changes in prices of related goods. An increase in the price of a complementary good typically decreases demand for the original good, while a decrease in the price of a substitute good also decreases demand for the original good, both shifting the demand curve to the left.