Exhibit 3-2 Demand curves

-In Exhibit 3-2, the shift in the demand curve from D₁ to D₂ could have been caused by which of the following?

Question

Exhibit 3-2 Demand curves -In Exhibit 3-2, the shift in the demand curve from D₁ to D₂ could have been caused by which of the following?

Quizplus · Accepted Answer

The shift in the demand curve from D₁ to D₂ suggests an increase in demand at every possible price level. This could be caused by an increase in expected future prices, which would lead consumers to buy more now to avoid paying a higher price later. Other factors listed, such as a decrease in price, increase in the price of a complement, or decrease in income if it is a normal good, would not necessarily lead to an increase in demand at every price level.

Exhibit 3-2 Demand Curves