Figure 3-B
-Refer to Figure 3-B.As a result of the decrease in donut prices at Yum Yum Donuts, Krispy Kreme managers discover that the demand for their donuts has:

Question

Figure 3-B 
-Refer to Figure 3-B.As a result of the decrease in donut prices at Yum Yum Donuts, Krispy Kreme managers discover that the demand for their donuts has:

Quizplus · Accepted Answer

According to the law of demand, when the price of a substitute good (in this case, Yum Yum Donuts) decreases, the demand for the original good (in this case, Krispy Kreme donuts) decreases. Therefore, the demand curve shifts to the left, from D₁ to D₀, indicating a decrease in demand for Krispy Kreme donuts.

Figure 3-B -Refer to Figure 3-B.As a Result of the Decrease in the Decrease