Economics – The allocation of resources - Demand | e-Consult

The demand curve has shifted to the right. This indicates an increase in demand for apples at every price level.

This shift is caused by an increase in consumer income. Apples are a normal good, meaning that as income rises, consumers tend to buy more of them. The increased purchasing power allows consumers to demand a greater quantity of apples, even at the same price. This results in a rightward shift of the entire demand curve. The effect on price and quantity depends on the shape of the demand curve and the magnitude of the income change. If the demand curve is relatively inelastic, the price increase will be small, but the quantity demanded will increase significantly. If the demand curve is relatively elastic, the price increase will be larger, but the quantity demanded will increase less.