Income Changes and Demand Shifts for Goods

Steps:

• Recall that a rightward demand curve shift indicates increased demand at every price.
• Classify goods: normal goods have demand rising with income; inferior goods have demand falling with income.
• Identify shifters: income changes shift the curve; price changes cause movement along the curve.
• Match: for inferior goods, lower income boosts demand, shifting right.

Why A is correct:

• Inferior goods definition: demand rises when income falls, as consumers switch to cheaper alternatives, increasing quantity demanded at each price.

Why the others are wrong:

• B: Price decrease moves along the demand curve, not a shift.
• C: Normal good with income decrease reduces demand, shifting left.
• D: Price decrease moves along the demand curve, not a shift.

Final answer: A