Consider the accompanying graph of the market for cigarettes. If the price of cigarettes increases, what will happen to the quantity demanded, assuming all other factors remain constant?

• A. The demand curve will shift to the right.
• B. The quantity demanded will remain unchanged.
• C. The quantity demanded will decrease.
• D. The quantity demanded will increase.

Answer: (C)

Verified step by step guidance

1. Understand the difference between a movement along the demand curve and a shift of the demand curve. A change in price causes a movement along the demand curve, not a shift.
2. Recall the Law of Demand, which states that, ceteris paribus (all other factors held constant), when the price of a good increases, the quantity demanded decreases.
3. Identify that an increase in the price of cigarettes will cause a movement upward along the demand curve, leading to a lower quantity demanded.
4. Recognize that the demand curve itself does not shift because the change is due to price, not other factors like income or preferences.
5. Conclude that the correct outcome is a decrease in quantity demanded, represented by a movement along the demand curve to a lower quantity at the higher price.