Question 1

Refer to the demand curves shown in the graph above. Which of the following would be most likely to cause the demand for Dr. Pepper to shift from $$D_0 to$$ $$D_1$$?

Accepted Answer

A decrease in income, assuming that Dr. Pepper is a normal good

Question 2

If the demand curve for Dr. Pepper shifts from $$D_0 to$$ $$D_1$$, what happens to the equilibrium price and quantity, ceteris paribus?

Accepted Answer

Both equilibrium price and quantity decrease

Question 3

Suppose the shift from $$D_0 to$$ $$D_1$$ was caused by a negative news report about the health effects of Dr. Pepper. Which of the following best describes this scenario?

Accepted Answer

A decrease in demand due to a change in consumer preferences

Microeconomics Exam Practice: Demand Curve Shifts

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