Exhibit 3-6

-Refer to Exhibit 3-6.If D? is the relevant demand curve,a decrease in the price of good X may cause

Question

Exhibit 3-6
 
-Refer to Exhibit 3-6.If D? is the relevant demand curve,a decrease in the price of good X may cause

Quizplus · Accepted Answer

A decrease in the price of good X, while holding all other factors constant, causes a movement along the demand curve D1 from point A to point B. This is because the quantity demanded of good X will increase as the price decreases, according to the law of demand. The demand curve itself does not shift. Option A is incorrect because a decrease in price would not cause demand to shift to D2 or D3, which represent different demand conditions such as changes in consumer preferences or population size.

Exhibit 3-6 -Refer to Exhibit 3-6.If D? Is the Relevant Demand Curve,a