Question:medium

Which of the following causes a rightward shift in the demand curve of a normal good?

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Price of Substitute \(\uparrow\) \(\Rightarrow\) Demand for given good \(\uparrow\)
Updated On: Jun 3, 2026
  • Fall in consumer income
  • Rise in price of substitute good
  • Rise in price of complementary good
  • Increase in production cost
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The Correct Option is B

Solution and Explanation

Step 1: Understanding the Concept:
A "Shift" in the demand curve (Increase or Decrease in Demand) occurs when factors other than the price of the commodity itself change.
A "Rightward Shift" indicates an "Increase in Demand," where more is demanded at the same price.
Step 2: Detailed Explanation:
Let's analyze the determinants of demand:
- (A) Fall in consumer income: For a "Normal Good," as income decreases, demand decreases. This causes a Leftward Shift.
- (B) Rise in price of substitute good: Substitute goods are those used in place of each other (e.g., Tea and Coffee). If the price of Coffee (substitute) rises, consumers will switch to Tea (the given good). This increases the demand for Tea, causing a Rightward Shift.
- (C) Rise in price of complementary good: Complementary goods are used together (e.g., Car and Petrol). If the price of Petrol rises, it becomes more expensive to use a Car, so demand for Cars will fall. This causes a Leftward Shift.
- (D) Increase in production cost: This is a factor affecting Supply. It would cause the Supply curve to shift, not the Demand curve.
Step 3: Final Answer:
A rise in the price of a substitute good directly increases the demand for its counterpart, leading to a rightward shift in the demand curve.
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