ECONOMICS
DEMAND
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Product A loses appeal for consumers
|
|
|
Suppliers expect a decrease in the price of Product A in the future
|
|
|
price of a substitute good, Product B, decreases
|
|
|
the average annual income increases
|
Detailed explanation-1: -Answer and Explanation: An increase in the consumer’s income causes the demand for a normal good to increase (shift to the right) regardless of whether the good is a substitute or a complement.
Detailed explanation-2: -Demand Curve Shifts Right The curve shifts to the right if the determinant causes demand to increase. This means more of the good or service are demanded even though there’s no change in price. When the economy is booming, buyers’ incomes will rise. They’ll buy more of everything, even though the price hasn’t changed.
Detailed explanation-3: -Positive cross-price elasticity means that the demand for a good or service will increase if the price of a substitute good increases and vice versa. Therefore, if the demand curve for standard goods shifts rightward, this could be thanks to a rise in the prices of substitute goods.
Detailed explanation-4: -The correct answer is b) an increase in the price of a substitute good. The shift of the demand curve to the left refers to a fall in demand. In the case of an inferior good, as the price of substitute increases, the demand for the inferior good decreases.
Detailed explanation-5: -Therefore, if product A is inferior good, the demand of product A will reduce when money income increases and demand curve for product A will shift leftwards.