Which of the following factors would most directly cause the market demand curve for a normal good to shift to the right (increase) at every price, holding other factors constant?

• A. A decrease in the good's own price
• B. A decrease in the quantity demanded due to a higher price of the good
• C. An increase in consumers' incomes
• D. A movement along the demand curve caused by a rise in the good's own 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 occurs when the price of the good itself changes, affecting the quantity demanded but not the demand curve's position.
2. Recognize that a shift of the demand curve means that at every price, the quantity demanded changes. This happens due to factors other than the good's own price, such as changes in consumer income, tastes, prices of related goods, expectations, or number of buyers.
3. Recall that for a normal good, an increase in consumers' incomes leads to an increase in demand because consumers can now afford to buy more of the good at every price level. This causes the demand curve to shift to the right.
4. Evaluate the options: a decrease in the good's own price or a rise in the good's own price causes movements along the demand curve, not shifts; a decrease in quantity demanded due to a higher price is also a movement along the curve.
5. Conclude that the factor that most directly causes the market demand curve for a normal good to shift to the right is an increase in consumers' incomes, holding other factors constant.