Exhibit 4.1

-Refer to Exhibit 4.1 for the demand curves of baby formula. Which of the following changes is likely to be caused by an increase in the birth rate?

Question

Exhibit 4.1
 
-Refer to Exhibit 4.1 for the demand curves of baby formula. Which of the following changes is likely to be caused by an increase in the birth rate?

Quizplus · Accepted Answer

An increase in the birth rate would lead to an increase in the demand for baby formula. This would cause a shift of the demand curve from D₁ to D₂, as shown in exhibit 4.1. A shift of the demand curve represents a change in the quantity demanded at every given price, while a movement along the demand curve represents a change in the quantity demanded only due to a change in price. Therefore, options B, D, and E are not correct. Option C is also incorrect as it suggests a decrease in the demand for baby formula, which is not consistent with the given scenario.

Exhibit 4.1 -Refer to Exhibit 4.1 for the Demand Curves of Baby