What occurs to the demand curve when consumers have more disposable income?

• A. It shifts to the left
• B. It shifts upward
• C. It shifts to the right
• D. It becomes vertical

Answer: (C)

When consumers experience an increase in disposable income, their ability to purchase goods and services enhances significantly. As a result, they are more likely to buy more products at every price level, leading to an increase in overall demand for those goods. The demand curve represents the relationship between price and quantity demanded, and when demand increases, the entire curve shifts to the right. This reflects a higher quantity demanded at each price point due to the consumers' increased purchasing power. The shift indicates that consumers are willing and able to buy more of the goods available in the market, which aligns perfectly with the situation of having more disposable income.