Suppose that the demand curve fordesktop computers shifts rightward and at the s

Question

Suppose that the demand curve fordesktop computers shifts rightward and at the same time the supplycurve shifts leftward. Which of the following could have causedthese shifts? Desktopcomputers are a normal good and incomes increased, while the laborcosts of producing personal computers increased. Desktopcomputers are a normal good and incomes increased, while more firmsentered the market. The price of alaptop computer, a substitute for desktop computers, fell and thecost of producing desktop computers decreased. Consumerspurchased more computers because of the Christmas season and thelabor costs of producing desktop computers decreased. Desktopcomputers are a normal good and incomes decreased, while the laborcosts of producing personal computers increased

Explanation / Answer

When the demand curve shifts right, the amount of computerssold increases when the price stays the same. It makes the most sense to have the cause be a normalgood with increased incomes. Whent he supply curve shifts left, it now costs more toproduce the same amount computers. Something in production costs had to rise. The answer would then be the top one "Desktop computers are a normal good and incomes increased,while the labor costs of producing personal computersincreased."

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