Multiple Choice
Which of the following would shift the demand curve for gasoline to the right?
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3. The Market Forces of Supply and Demand
Shifts in the Demand Curve
Multiple Choice
Which of the following could cause an increase in the demand for peanut butter?
A
A decrease in consumer income, assuming peanut butter is a normal good
B
A rise in the price of jelly, a complement to peanut butter
C
An increase in the population of people who like peanut butter
D
A decrease in the price of peanut butter
Verified step by step guidance1
Understand the concept of demand: Demand refers to the quantity of a good that consumers are willing and able to purchase at various prices, holding other factors constant.
Recall that for a normal good, a decrease in consumer income typically causes a decrease in demand, so a decrease in income would not increase demand for peanut butter if it is a normal good.
Recognize that jelly is a complement to peanut butter, so a rise in the price of jelly would generally decrease the demand for peanut butter, not increase it.
Consider the effect of population changes: An increase in the population of people who like peanut butter would increase the number of potential buyers, thus increasing the demand for peanut butter.
Note that a decrease in the price of peanut butter causes a movement along the demand curve (an increase in quantity demanded), but does not shift the demand curve itself, so it does not represent an increase in demand.
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