Figure 3-5 -In Figure 3-5, if the initial demand for margarine were D₁, an increase in the price of butter, which is a substitute for margarine, would tend to cause which of the following changes in the market for margarine? A) a shift in the demand curve from D₁ to D₂ B) a shift in the demand curve from D₂ to D₁ C) a movement along demand curve D₁ from a to b D) a movement along demand curve D₁ from b to a

Question

Quizplus · Accepted Answer

An increase in the price of butter, a substitute for margarine, will make margarine relatively cheaper and thus increase the demand for margarine, shifting the demand curve from D1 to D2.

Figure 3-5 -In Figure 3-5, If the Initial Demand for Margarine Were