Question

Suppose I drink sweet coffee and the price of sugar goes up. In such a case, my demand curve for coffee will

A. not shift and will stay in the same location.
B. shift in an unpredictable
C. shift to the left

Answer 1

The demand for good is an inverse relationship between price and quantity. The graphical relationship between price and quantity demanded is depicted by the demand curve. Any point on the demand curve shows the quantity consumer demands for any particular price.

The demand for good depends on various factors such as; own price, price of related goods, income, test and preference of the consumer. Among these factors the change in the price of the good changes the quantity demanded and represents the good for movement along the demand curve. The changes in other factors change the demand for each price and represent the shift in demand curve.

Sweet coffee and sugar is complements and consumed jointly. Then increase in price of sugar decreases demand for sweet coffee. The demand curve shift to the left.

Then the correct option is: C.