Question

Consider the demand curve for coffee, if the price per cup of coffee goes up then...

Consider the demand curve for coffee, if the price per cup of coffee goes up then

A. there is movement up on the given demand curve
B. none of above
C. the demand curve for coffee shifts to the right.

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Answer #1

The right answer is option A. there is movement up on the given demand curve

Explanation: When quantity demanded changes because of changes in the price, there is a movement along the demand curve rather than any shift in the demand curve. Therefore, in this case, there will be a movement on the given demand curve. Also, since the quantity demanded will fall with the increase in price, there will a movement up the demand curve. Note that demand curve is downward sloping, so going up the demand curve means a fall in quantity demanded as the price increase.

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