Question

Which of the following would shift the demand for coffee from d1 to d3?

1) A decrease in the price of tea
2) An increase in the price of coffee
3) A decrease in consumer income
4) An increase in consumer preferences for tea

Answer 1

An increase in the price of coffee would shift the demand for coffee from D1 to D3.

Step-by-step explanation:

In this case, option 2, an increase in the price of coffee, would shift the demand for coffee from D1 to D3.

According to the law of demand, there is an inverse relationship between the price of a good and the quantity demanded. When the price of coffee increases, consumers tend to buy less of it.

This shift in demand is represented graphically as a movement along the demand curve from D1 to D3.