Exhibit 3-6 Refer to Exhibit 3-6. If D₁ is the relevant demand curve, a decrease in the price of good X may cause A)demand to shift from D₁ to D₂. B)demand to shift from D₁ to D₃. C)a movement along D₁ from point A to point B. D)a movement along D₁ from point A to point C.

Question

Quizplus · Accepted Answer

A decrease in price would not cause a shift in the demand curve, but would cause a movement along the same demand curve from point A to point B, as quantity demanded would increase due to the lower price. Option A and B suggest a shift in the demand curve, which is not accurate in this scenario. Option D suggests a movement from point A to point C which is not accurate as the new equilibrium point would be at point B, not at point C.

Exhibit 3-6 Refer to Exhibit 3-6. If D1 Is the Relevant Demand

Exhibit 3-6 Refer to Exhibit 3-6. If D₁ Is the Relevant Demand