Which of the following factor makes the demand curve to shifts leftward for a normal goods?
Which of the following factor makes the demand curve to shifts leftward for a normal goods?
Solution
Option 1 -> For normal goods, an increase in income leads to increased demand, shifting the curve rightward, not leftward.
Option 2 -> When preferences favor a good, demand increases, causing a rightward shift of the demand curve.
Option 3 -> A price decrease causes movement along the demand curve (change in quantity demanded), not a shift of the curve itself.
Option 4 -> For normal goods, a decrease in consumer income reduces purchasing power, leading to decreased demand at every price level, shifting the demand curve leftward.
Hence, Option 4: When the consumer's income decreases -> A leftward shift in the demand curve indicates a decrease in demand at all price levels. For normal goods (goods for which demand increases with income), when consumer income falls, they have less purchasing power and buy less of the good at every price point. This causes the entire demand curve to shift to the left. This is different from a movement along the curve, which occurs due to price changes. -> correct
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