Suppose that the demand curve for desktop computers shifts rightward and at the same time the supply curve shifts leftward.Which of the following could have caused these shifts?
A) Desktop computers are a normal good and incomes increased, while more firms entered the market.
B) The price of a laptop computer, a substitute for desktop computers, fell, and the cost of producing desktop computers decreased.
C) Consumers purchased more computers because of the Christmas season, and the labor costs of producing desktop computers decreased.
D) Desktop computers are a normal good and incomes increased, while the labor costs of producing personal computers increased.
E) Desktop computers are a normal good and incomes decreased, while the labor costs of producing personal computers increased.

Question

Quizplus · Accepted Answer

A rightward shift in the demand curve for desktop computers can be caused by an increase in incomes if desktop computers are considered a normal good, as people have more money to spend and thus demand more. A leftward shift in the supply curve can be caused by an increase in the labor costs of producing desktop computers, as it becomes more expensive to produce them, leading to a decrease in supply. Option D correctly identifies both these factors.

Suppose That the Demand Curve for Desktop Computers Shifts Rightward