Question

Which of the following would lead to an INCREASE in the demand for golf balls?

a. A decrease in the price of golf balls.

b. An increase in the price of golf clubs.

c. A decrease in the cost of producing golf balls.

d. An increase in average household income when golf balls are a normal good.

Answer 1

Answer : Option d) An increase in average household income when golf balls are a normal good.

An increase in the demand for golf balls is different from an increase in the quantity demanded for golf balls. The quantity demanded changes when price changes. But an increase in demand implies a rightward (or upward) shift of the demand curve. This shift is due to external factors and not own price.

Here when the average household income increases, people have more money with them to use it more consumption. Now more income leads to higher consumption rationally. Since golf balls are a normal good, so an increase in income leading to an increase in consumption will lead to an increased demand for golf balls at every given price. Thereby the demand curve shifts rightward. That is an increase in demand for golf balls.