What signifies a shift in a demand curve?

A shift in a demand curve occurs when there is a change in demand at every price level, meaning that the quantity demanded at each price changes. This can be driven by various factors, such as consumer income and the prices of related goods.

When consumer income changes, it affects how much of a good or service consumers are able and willing to buy. For example, if consumer income increases, people may buy more of a good, leading to an outward shift of the demand curve. Conversely, if income decreases, demand may fall, causing an inward shift.

Similarly, the prices of related goods can also influence demand. If the price of a substitute good falls, consumers might buy more of that substitute and less of the original good, shifting the demand curve of the original good to the left. On the other hand, if the price of a complementary good decreases, the demand for the original good might increase, leading to a rightward shift in the demand curve.

Thus, the correct answer encompasses these insights, acknowledging that both changes in consumer income and changes in the prices of related goods can cause a shift in the demand curve.