FIGURE 4-3

-Refer to Figure 4-3. Starting with initial curves D₀ and S₀, which movement is consistent with a decrease in the price of cotton (a substitute)?

Question

FIGURE 4-3
 
-Refer to Figure 4-3. Starting with initial curves D₀ and S₀, which movement is consistent with a decrease in the price of cotton (a substitute)?

Quizplus · Accepted Answer

A decrease in the price of cotton, a substitute, would lead to a decrease in demand for the good in question, shifting the demand curve leftward from D₀ to D₁, consistent with a movement from Point A to Point H.

FIGURE 4-3 -Refer to Figure 4-3. Starting with Initial Curves D₀ and Initial