Exhibit 3-2 Demand curves

-In Exhibit 3-2,the shift in the demand curve from D₁ to D₂ could have been caused by which of the following?

Question

Exhibit 3-2 Demand curves
 
-In Exhibit 3-2,the shift in the demand curve from D₁ to D₂ could have been caused by which of the following?

Quizplus · Accepted Answer

The shift in the demand curve from D1 to D2 could have been caused by an increase in expected future prices. This could lead consumers to purchase more of the good now to avoid paying higher prices in the future, resulting in an increase in demand even at the current price level. A decrease in price would result in a movement along the same demand curve (not a shift), an increase in the price of a complement would shift the demand curve for that complement (not the good in question), and a decrease in income if it is a normal good would shift the demand curve to the left (not the right).

Exhibit 3-2 Demand Curves