which is the following will shift the demand curve for milk? a. change in the income...

which is the following will shift the demand curve for milk?

a. change in the income of buyers of milk

b. change in price of milk

c. change in the input price of milk

d. none of the above

Solutions

Expert Solution

The correct answer is (a) change in income of buyers of milk

Reason:

The shift in demand curve of any product happens when there are changes in factors affecting demand other than price of the product. Here there are three options which are explained as follows:

a. Change in income of buyers of milk is a factor affecting demand other than price. As income will change it will increase/decrease the demand accordingly thus making the demand curve for milk to shift inward or outward.

b. Change in price of milk will lead to increase/decrease of quantity of milk demanded. This will lead to movement along the same demand curve, there will be no shift in demand curve (As we have price on the y axis, so any change in price will lead to movement along the same demand curve)

c. Change in input price of milk is a factor which will impact the supply of the milk. It has nothing to do with the demand curve.

Thus correct answer is a. Change in the income of buyers of milk

Rahul Sunny answered 9 months ago

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