ECONOMICS
MARKETS AND PRICES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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an increase in consumer income
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a decline in number of consumers
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an increase in the price of a complement
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a decrease in price of a substitute
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Detailed explanation-1: -For most goods, called normal goods, if consumer incomes increase, demand will increase and vice versa. So if incomes increase, the demand curve for restaurant meals, and cars, and boats, will shift to the right. At the same prices people will buy more.
Detailed explanation-2: -Decrease in demand may occur due to the following reasons: (i) A goods has gone out of fashion or the tastes of the people for a commodity have declined. (ii) Incomes of the consumers have fallen. (iii) The prices of the substitutes of the commodity have fallen.
Detailed explanation-3: -An inferior good is an economic term that describes a good whose demand drops when people’s incomes rise. These goods fall out of favor as incomes and the economy improve as consumers begin buying more costly substitutes instead.
Detailed explanation-4: -The demand for a good increases or decreases depending on several factors. This includes the product’s price, perceived quality, advertising spend, consumer income, consumer confidence, and changes in taste and fashion.