If income levels of consumers within a given economy increase, what would happen to the demand curve for cell phones, a normal good, and the demand curve for instant noodles, an inferior good?
A.
The demand curves would both shift to the right.
B.
The demand curve for cell phones would shift to the left, and the demand curve for instant noodles would shift to the right.
C.
The demand curve for cell phones would shift to the right, and the demand curve for instant noodles would shift to the left.
D.
The demand curve for cell phones would shift to the right, and the demand curve for instant noodles would remain unchanged.
C.
The demand curve for cell phones would shift to the right, and the demand curve for instant noodles would shift to the left.
When income levels of consumers increase, they are more likely to purchase higher quality goods and services, such as cell phones. This would increase the demand for cell phones, shifting the demand curve to the right. On the other hand, the demand for instant noodles, an inferior good, would decrease as consumers are likely to substitute it with better quality food choices with their higher incomes. This would shift the demand curve for instant noodles to the left.