Which of the following factors would cause a rightward shift in the market demand curve for a normal good? 1. Increase in the price of a substitute good. 2. Decrease in the income of consumers. 3. Increase in the number of consumers.

Correct Option The correct option is 1 and 3 only. Explanation A rightward shift in the market demand curve represents an increase in demand, meaning consumers are willing to purchase a larger quantity of the good at every price level. This shift is caused by changes in non-price determinants such as consumer income, prices of related goods, tastes, and the size of the population. Statement-wise Analysis - Statement 1 is Correct: A substitute good is a product that can be used in place of another (e.g., tea and coffee). If the price of a substitute good increases, consumers will switch their consumption to the good in question because it has become relatively cheaper. This increases the demand for the good, causing a rightward shift in its demand curve. - Statement 2 is Incorrect: For a "normal good," demand is directly related to consumer income. A decrease in income reduces the purchasing power of consumers, leading to a decrease in the quantity demanded at all price levels. This results in a leftward shift, not a rightward shift, of the demand curve. - Statement 3 is Correct: Market demand is the aggregate of individual demands. An increase in the number of consumers (population growth or market expansion) increases the total quantity demanded at any given price. Consequently, the market demand curve shifts to the right. Key Takeaway: A rightward shift in the demand curve for a normal good is caused by an increase in the price of substitutes, a decrease in the price of complements, an increase in consumer income, favorable changes in preferences, or an increase in the number of buyers.

NCERT Class 12 Economics — Chapter 2: Market Equilibrium

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Which of the following factors would cause a rightward shift in the market demand curve for a normal good?

Increase in the price of a substitute good.
Decrease in the income of consumers.
Increase in the number of consumers.

Official previous-year question

Verified 1 Aug 2026.

Options

A1 and 2 only
B1 and 3 only
C2 only
D1, 2 and 3

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Solution

Correct Option

The correct option is 1 and 3 only.

Explanation

A rightward shift in the market demand curve represents an increase in demand, meaning consumers are willing to purchase a larger quantity of the good at every price level. This shift is caused by changes in non-price determinants such as consumer income, prices of related goods, tastes, and the size of the population.

Statement-wise Analysis

Statement 1 is Correct: A substitute good is a product that can be used in place of another (e.g., tea and coffee). If the price of a substitute good increases, consumers will switch their consumption to the good in question because it has become relatively cheaper. This increases the demand for the good, causing a rightward shift in its demand curve.
Statement 2 is Incorrect: For a "normal good," demand is directly related to consumer income. A decrease in income reduces the purchasing power of consumers, leading to a decrease in the quantity demanded at all price levels. This results in a leftward shift, not a rightward shift, of the demand curve.
Statement 3 is Correct: Market demand is the aggregate of individual demands. An increase in the number of consumers (population growth or market expansion) increases the total quantity demanded at any given price. Consequently, the market demand curve shifts to the right.

Key Takeaway: A rightward shift in the demand curve for a normal good is caused by an increase in the price of substitutes, a decrease in the price of complements, an increase in consumer income, favorable changes in preferences, or an increase in the number of buyers.

Your note

More from Chapter 2: Market Equilibrium

With reference to the demand for a normal good, consider the following statements: 1. An increase in consumers' income leads to a rightward shift in the market demand curve. 2. An increase in the number of consumers leads to a rightward shift in the market demand curve. 3. A rightward shift in demand, with supply constant, leads to a decrease in equilibrium price. Which of the statements given above is/are correct?

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Consider the following statements regarding Market Equilibrium in a perfectly competitive market: 1. An equilibrium is defined as a situation where the plans of all consumers and firms in the market match. 2. In equilibrium, the aggregate quantity that all firms wish to sell equals the quantity that all consumers wish to buy. 3. If the market supply is greater than market demand at a specific price, the market is said to be in a state of excess demand. Which of the statements given above is/are correct?

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Consider the following statements regarding the determination of equilibrium with a fixed number of firms: 1. If the prevailing price is lower than the equilibrium price, there will be excess supply in the market. 2. In a situation of excess demand, the market price tends to increase. 3. As price rises, quantity demanded falls and quantity supplied increases, moving the market towards equilibrium. Which of the statements given above is/are correct?

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With reference to the Labour Market, consider the following statements: 1. Households are the suppliers of labour, while the demand for labour comes from firms. 2. The demand curve for labour by a profit-maximising firm is upward sloping. 3. The wage rate is determined at the intersection of the demand and supply curves of labour. Which of the statements given above is/are correct?

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Consider the following statements regarding the Marginal Revenue Product of Labour (MRPL): 1. It is the extra cost incurred for employing the last unit of labour. 2. It is calculated as the product of Marginal Revenue and Marginal Product of labour. 3. For a perfectly competitive firm, the Marginal Revenue Product of Labour is equal to the Value of Marginal Product of Labour. Which of the statements given above is/are correct?

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Correct Option

The correct option is 1 and 3 only.

Explanation

Statement-wise Analysis

Statement 1 is Correct: A substitute good is a product that can be used in place of another (e.g., tea and coffee). If the price of a substitute good increases, consumers will switch their consumption to the good in question because it has become relatively cheaper. This increases the demand for the good, causing a rightward shift in its demand curve.
Statement 2 is Incorrect: For a "normal good," demand is directly related to consumer income. A decrease in income reduces the purchasing power of consumers, leading to a decrease in the quantity demanded at all price levels. This results in a leftward shift, not a rightward shift, of the demand curve.
Statement 3 is Correct: Market demand is the aggregate of individual demands. An increase in the number of consumers (population growth or market expansion) increases the total quantity demanded at any given price. Consequently, the market demand curve shifts to the right.