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Multiple Choice
An increase in the number of consumers in the market for chocolate would most likely:
A
Cause a movement down along the demand curve for chocolate
B
Cause a movement up along the demand curve for chocolate
C
Shift the demand curve for chocolate to the left
D
Shift the demand curve for chocolate to the right
Verified step by step guidance
1
Understand the difference between a movement along the demand curve and a shift of the demand curve. A movement along the demand curve happens when the price of the good changes, while a shift of the demand curve occurs when a non-price factor changes.
Identify the factor changing in this problem: the number of consumers in the market. This is a non-price determinant of demand, which affects the entire demand curve rather than just the quantity demanded at a given price.
Recall that an increase in the number of consumers means more people want to buy chocolate at every price level, which increases overall demand.
Since demand increases, the demand curve shifts to the right, indicating a higher quantity demanded at each price.
Conclude that the correct effect of an increase in the number of consumers is a rightward shift of the demand curve, not a movement along it.