Which of the following can shift the demand curve to the right?
(A) Increase in the income of the consumer (For normal goods).
(B) Decrease in the price of complementary goods.
(C) Increase in the price of substitute goods.
(D) Increase in the price of goods.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → (A), (B) and (C) only
The demand curve is drawn for a given income, given prices of other goods and given preferences. When one of these changes, the whole curve shifts.
(A) Increase in the income of the consumer (For normal goods). Correct. Demand for a normal good moves in the same direction as income. More is demanded at each price, so the curve shifts right.
(B) Decrease in the price of complementary goods. Correct. Complementary goods are used together, such as tea and sugar. When sugar becomes cheaper, the demand for tea rises.
(C) Increase in the price of substitute goods. Correct. Tea and coffee are substitutes. When coffee becomes dearer, consumers shift to tea, so the demand for tea rises.
(D) Increase in the price of goods. Incorrect. A change in the good’s own price causes a movement along the demand curve. The curve itself stays where it is.
NCERT (2026-27): “2.4.4 Substitutes and Complements … Goods which are consumed together are called complementary goods. Examples of goods which are complement to each other include tea and sugar, shoes and socks, pen and ink, etc. Since tea and sugar are used together, an increase in the price of sugar is likely to decrease the demand for tea and a decrease in the price of sugar is likely to increase the demand for tea. Similar is the case with other complements. In general, the demand for a good moves in the opposite direction of the price of its complementary goods.… 2.4.5 Shifts in the Demand Curve The demand curve was drawn under the assumption that the consumer’s income, the prices of other goods and the preferences of the consumer are given. What happens to the demand curve when any of these things changes? Given the prices of other goods and the preferences of a consumer, if the income increases, the demand for the good at each price changes, and hence, there is a shift in the demand curve. For normal goods, the demand curve shifts rightward and for inferior goods, the demand curve shifts leftward. Given the consumer’s income and her preferences, if the price of a related good changes, the demand for a good at each level of its price changes, and hence, there is a shift in the demand curve. If there is an increase in the price of a substitute good, the demand curve shifts rightward. On the other hand, if there is an increase in the price of a complementary good, the demand curve shifts leftward.… 2.4.6 Movements along the Demand Curve and Shifts in the Demand Curve … At higher prices, the demand is less, and at lower prices, the demand is more. Thus, any change in the price leads to movements along the demand curve. On the other hand, changes in any of the other things lead to a shift in the demand curve.…” |