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Question
Statistics
Posted 2 months ago

Something has changed about how consumers buy hats which resulted in the change shown in this graph.
Figure 1: The demand for hats

Which of the following changes could this graph represent?

Choose 1 answer:
(A) People do not like hats as much as they did before, resulting in a decrease in the quantity demanded for hats
(B) People do not like hats as much as they did before, so their demand has decreased
(C) People like hats more than they did before, and their demand for hats has increased
(D) There has been a decrease in the price of hats, resulting in an increase in the quantity demanded for hats
(E) People do not like hats as much as they did before, resulting in an increase in the quantity demanded for hats
Related content
Change in expected future prices and demand
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Answer from Sia
Posted 2 months ago
Solution by Steps
step 1
Interpret the graph: The graph shows two demand curves for hats, D1 and D2. The demand curve D1 starts at a higher price and quantity intersection than D2. The shift from D1 to D2 indicates a change in demand
step 2
Analyze the shift: The shift from D1 to D2 is to the left, which indicates a decrease in demand at every price level. This is not a movement along the demand curve, which would indicate a change in quantity demanded due to a change in price
step 3
Relate the shift to the answer choices: A leftward shift in the demand curve suggests that at every price, consumers are willing to buy less than before, which indicates a decrease in demand, not just a change in the quantity demanded
Answer
B
Key Concept
Shift in Demand Curve
Explanation
A leftward shift in the demand curve represents a decrease in demand, which is different from a decrease in quantity demanded caused by a price change.

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