Which of the following will cause an increase in demand for a good?
- Aan increase in income if the good is an inferior goods
- Ba decrease in the price of the goods
- Ca decrease in income if the good is a normal goods
- Dan increase in the price of its substitute goods
Solution & Step-by-step Explanation
An increase in the price of a substitute good makes the substitute relatively more expensive, causing consumers to switch to the original good, thereby increasing the demand for the original good. Note that a decrease in the price of the good itself causes an increase in quantity demanded (movement along the curve), not an increase in demand (shift of the curve).