The Covid-19 outbreak became a cause of concern when the World Health Organization (WHO) declared it a pandemic. Soon, lockdowns were seen all over the world. India declared its first lockdown in March 2020 for 21 days, and it was extended later. As the news of the lockdown spread in the country, people rushed to markets to hoard groceries. Vendors sold bread and biscuits to the common man at inflated prices. Supply chains were broken by the complete lockdown, prices rose sharply and the entire economy came to a standstill.
During the lockdown, many daily-wage workers lost their income. Bread is a normal good for them. Other things remaining the same, what does this fall in income do to their demand curve for bread?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → It shifts leftward (decrease in demand)
For a normal good, demand moves in the same direction as income. When the workers’ income falls, they buy less bread at every price, so the curve shifts left.
The price of bread has not changed, so there is no movement along the curve.
Note: NTA uses the term ‘decrease in demand’; NCERT describes this as a leftward shift of the demand curve.
NCERT (2026-27): “2.4.3 Normal and Inferior Goods … For most goods, the quantity that a consumer chooses, increases as the consumer’s income increases and decreases as the consumer’s income decreases. Such goods are called normal goods. Thus, a consumer’s demand for a normal good moves in the same direction as the income of the consumer. …” “2.4.5 Shifts in the Demand Curve … 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. …” |