Changes in which of the following do ??? cause the demand curve to shift? A) the price of a complement good

Economics Dec 15, 2020

Changes in which of the following do ??? cause the demand curve to shift?

A) the price of a complement good.

B) the price of the good.

C) the price of a substitute good.

D) buyers' incomes.

Expert Solution

b) The price of the good is the right answer. A consumer moves along the demand curve as a result of a change in the price of the good.

The other are not correct because

a) price of a complement good causes demand curve to shift, e.g., a consumer will demand more of the good if a complement becomes cheaper and it is shown by a rightward shift in demand curve

c) price of a substitute good causes demand curve to shift, e.g., a consumer will demand more of the good if a substiture becomes more expensive and it is shown by a rightward shift in demand curve

d) demand curve shift rightwards if a buyer's income increases (this is of course true for a normal good)

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote