Use the following graph of the demand for coffee: Refer to the above diagram of three demand curves for coffee. Which of the following would cause a shift in coffee demand from D₁ to D₂?

Question

Quizplus · Accepted Answer

An increase in consumer incomes would shift the demand curve for coffee to the right, from D₁ to D₂, as consumers would have more disposable income to spend on coffee. A decrease in the price of tea (A) would likely lead to an increase in the demand for tea, but would not directly affect the demand for coffee. An increase in the prices of cream and sugar (C) could potentially decrease the demand for coffee if consumers perceive the overall cost of their coffee to be too high. A decrease in the price of coffee (D) would shift the demand curve to the right along the same curve, from point U1 to point U2, but would not shift the curve to a new location.

Use the Following Graph of the Demand for Coffee