Rightward Demand Shift from Income Growth

Steps:

• Assume D2 is right of D1, indicating increased demand for air travel.
• Recall demand shifters: income changes, preferences, prices of related goods, expectations, population.
• Evaluate options: identify which affects demand quantity at every price.
• Select the one increasing demand without changing supply.

Why C is correct:

• Higher incomes boost demand for normal goods like air travel, per the income effect in demand theory, shifting curve right.

Why the others are wrong:

• A: Raises air travel price, causing movement along demand curve, not shift.
• B: Decreases demand due to fear, shifting curve left.
• D: Increases production costs, shifting supply left and raising price, not demand.

Final answer: C