Question

The demand curve of a good shifts from DD’ to dd’.

This shift can be caused by:

(Choose the correct alternative)

Options

• Fall in the price of the good

• Rise in the price of the good

• Rise in the price of substitute goods

• Rise in the price of complementary goods

Answer 1

Rise in the price of substitute goods

Explanation:

The diagram shows a rightward shift, or increase in demand. A rise in substitute prices increases demand for this good; a change in its own price causes movement along the curve, while pricier complements reduce demand.