VirtualSC Economics Honors Practice Exam

An increase in the price of substitutes can indeed lead to a rightward shift in the demand curve for a specific good or service. This is because when the price of a substitute rises, consumers are likely to turn to the original good as a more economical alternative. For example, if the price of coffee increases significantly, more consumers may choose to buy tea instead, thereby increasing the demand for tea.

This concept is rooted in the law of demand, which indicates that consumers will substitute the more expensive product for a less expensive one, thus increasing demand for the latter. The shift in demand signifies that at any given price, consumers are now willing to purchase more of the good because it has become relatively more attractive compared to its substitute.

The other factors listed, such as a decrease in consumer income, a decrease in the number of consumers, and a decrease in consumer preferences, would generally result in a leftward shift in the demand curve, indicating a decrease in demand for the good in question. Hence, the increase in the price of substitutes is the factor that correctly relates to an increase in demand and a rightward shift in the demand curve.