Which of the Following Will Cause the Demand Curve for a Normal

question 51

Multiple Choice

Which of the following will cause the demand curve for a normal good to shift to the right?

• A) A fall in the income levels of consumers.
• B) An increase in the price of a complementary good.
• C) An increase in the price of a substitute good.
• D) An increase in the cost of the inputs used to produce the good.

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Definitions:

Cost of Equity

The return that investors expect for investing in a company's equity, often calculated using models like the Capital Asset Pricing Model (CAPM).

Market Risk Premium

Slope of the Security Market Line; the difference between the expected return on a market portfolio and the risk-free rate.

Cost of Equity

The return a company requires to decide if an investment meets capital return requirements and can finance its operations.

Risk-Free Rate

The return on an investment with zero risk, typically associated with government bonds.