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Other things being equal, a rise in the income of consumers for a normal good will cause which change to the demand curve?
AA leftward shift of the demand curve
BA rightward shift of the demand curve
CAn upward movement along the curve
DA downward movement along the curve
Answer & Solution
Correct answer: B. A rightward shift of the demand curve
1. A change in a non-price factor shifts the whole demand curve.
2. For a normal good, higher income raises quantity demanded at every price.
3. An increase in demand at every price shifts the curve to the right.
4. So the demand curve shifts rightward.
_Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 2 Unit I "Law of Demand and Elasticity of Demand", p.14_
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