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WAEC Economics 1998 Question 7

Question 7

Theory of Demand

Which of the following will shift the demand curve for Milo to the right?

  1. A.an increase in consumer's income
  2. B.A rise in the price of Milo
  3. C.a tax on cocoa producers
  4. D.a fall in the quantity demanded of Milo
  5. E.A fall in the price of Milo
Show the answer and explanation

Answer: A (an increase in consumer's income)

Explanation

A change in Milo's own price only moves along the demand curve; higher income raises demand for a normal good at every price, shifting the curve right.