Consider the demand curve $Q ^ { d } = 40 - 2 P + 6 i$ . If the value of i rises, the demand curve will
A)not shift at all
B)shift to the right
C)shift to the left
D)rotate so it becomes upward sloping

Question

Quizplus · Accepted Answer

An increase in i, which represents income of consumers, will lead to a higher level of demand at every price level. This means that the demand curve will shift to the right. When the value of i rises (presumably this represents an increase in income), the demand for the good will increase, resulting in a rightward shift of the demand curve. This is because consumers now have more disposable income and are able and willing to purchase more of the good at each price level.

Consider the Demand Curve Qd=40−2P+6iQ ^ { d } = 40 - 2 P + 6 iQd=40−2P+6i

Consider the Demand Curve $Q ^ { d } = 40 - 2 P + 6 i$