High School

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If coffee sold at Starbucks is a normal good, then an increase in consumers' income will:

A. Increase the demand for Starbucks coffee.

B. Decrease the demand for Starbucks coffee.

C. Have no effect on the demand for Starbucks coffee.

D. Shift the demand curve to the left.

Answer :

Final answer:

An increase in consumers' income will likely lead to an increase in the demand for coffee from Starbucks, considered a normal good, as more income means consumers are willing to spend more on such products.

Explanation:

If coffee sold at Starbucks is a normal good, then an increase in consumers' income will generally lead to an increase in the demand for Starbucks coffee. This concept is based on the idea that as income rises, consumers tend to purchase more normal goods because they have more spending power. Factors contributing to an increase in demand can include a taste shift to greater popularity of the product, a rise in the population likely to buy the product, an income rise for a normal good, and a rise in the price of substitutes. When income rises, consumers often move away from inferior goods--products whose demand falls as income increases--and consume more normal goods, thus shifting the demand curve to the right.

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