Which of the following cause demand of a product to increase? a) An increase in consumer's income b) An…
An outward shift (increase) in the demand curve for a normal product is caused by an increase in consumers' income (a), an increase in the price of substitute goods (which…
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Which of the following cause demand of a product to increase?
a) An increase in consumer's income
b) An increase in the prices of substitutes
c) An increase in the price of complements
d) An increase in the number of substitutes
e) An increased taste for the commodity.
Answer and explanation
Correct answer D
An outward shift (increase) in the demand curve for a normal product is caused by an increase in consumers' income (a), an increase in the price of substitute goods (which makes the product relatively cheaper) (b), and a favorable shift in consumer tastes and preferences toward the commodity (e). An increase in the price of complements or a proliferation of substitutes reduces demand for the product.
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UGC NET Commerce