What would happen to the demand curve when there is an increase in the price of substitute products?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is Option 1 i.e. Outward shift.
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What would happen to the demand curve when there is an increase in the price of substitute products? |
Outward shift |
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What is an outward shift in the demand curve? |
An outward shift in demand will occur if income increases, in the case of a normal good; however, for an inferior good, the demand curve will shift inward noting that the consumer only purchases the good as a result of an income constraint on the purchase of a preferred good. |