Which of the following best describes a reason the demand curve for a good can shift (i.e., consumer demand changes)?

• A. A change in the good’s own price, causing a movement along the existing demand curve
• B. A change in production costs that shifts the supply curve for the good
• C. A change in consumer income or preferences that changes willingness to buy the good at every price
• D. A change in the quantity demanded due to a temporary shortage at the current price

Answer: (C)

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 happens when the price of the good itself changes, affecting quantity demanded but not the demand curve's position.
2. Recognize that a shift in the demand curve means the entire demand relationship changes, so at every price, consumers are willing to buy a different quantity than before.
3. Identify factors that cause the demand curve to shift, such as changes in consumer income, tastes and preferences, prices of related goods (substitutes or complements), expectations about future prices, or demographic changes.
4. Note that changes in production costs affect the supply curve, not the demand curve, so they do not cause the demand curve to shift.
5. Conclude that the best description of a demand curve shift is a change in consumer income or preferences that alters willingness to buy the good at every price, which moves the entire demand curve.