-Refer to the above figure. Suppose that Cheerios and Apple Jacks are substitutes. Which diagram shows the effect on the demand for Cheerios when the price of Apple Jacks cereal has increased?
A) A
B) B
C) neither graph
D) both graphs

Question

-Refer to the above figure. Suppose that Cheerios and Apple Jacks are substitutes. Which diagram shows the effect on the demand for Cheerios when the price of Apple Jacks cereal has increased?
A) A 
B) B 
C) neither graph 
D) both graphs

Quizplus · Accepted Answer

When the price of Apple Jacks increases, the demand for its substitute, Cheerios, will increase, shifting the demand curve for Cheerios to the right, as shown in diagram A.

-Refer to the Above Figure