Suppose that we illustrate demand and supply with quantity on the horizontal axis and price on the vertical axis. Let demand be a function of price and income, Qd (P, I). Price and income together must change in order to create a shift in the demand curve.

Question

Quizplus · Accepted Answer

A change in income alone can shift the demand curve, as it affects consumers' purchasing power, leading to a change in the quantity demanded at every price level without the need for a change in price.

Suppose That We Illustrate Demand and Supply with Quantity on the Horizontal