Question: In the figure given below that shows the demand for baby formula, whic

Question

Question: In the figure given below that shows the demand for baby formula, which of the following changes will be caused by the discovery that breast milk provides more protection against a life-threatening disease than baby formula? Market for baby formula Price D, Di Quantity O C D E A movement from point b on the demand curve D, to point c on the demand curve D A A shit in the demand curve from D, to D Amovement along the demand arve o, from point a to port b Ashvit in the demand curve trom D2 to D A movement along the demand curve D2 from point d to point c

Explanation / Answer

Ans: A shift in the demand curve from D2 to D1.

Explanation:

First of all, any change in price of a good is reflected by a movement along the demand curve, where as any change in factors other than price is reflected by a shift in demand curve.

Baby formula and breast milk are substitutes. Since discovery says breast milk provides more protection, the demand for breast milk will increase and the demand for baby formula will decrease. This decrease in demand for baby formula leads to a leftward shift in demand curve of baby formula.

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