Use the figure below to answer the following question(s). Figure 3-3 In Figure 3-3, if the initial demand for margarine were D ₁, the impact of a decrease in the price of butter, a substitute good for margarine, would be illustrated as A) a shift in the demand curve to D ₂. B) a shift in the demand curve to D ₃. C) a movement downward to the right along the original demand curve D ₁. D) none of the above.

Question

Quizplus · Accepted Answer

A decrease in the price of butter would make it a more attractive substitute for margarine, causing consumers to decrease their demand for margarine at every price level. This would result in a shift in the demand curve to the left, from D ₁ to D ₃. The correct answer is therefore B.

Use the Figure Below to Answer the Following Question(s)