Demand and Supply Consider the market for peanut butter. 12. A change in expecta

Question

Demand and Supply Consider the market for peanut butter. 12. A change in expectations of consumers will cause a. a movement along the demand curve b. a shift of the demand curve c. a movement along the supply curve d. a shift of the supply curve 13. A decrease in the price of hazelnut spread (a substitute for peanut butter) will cause a. a movement along the demand curve b. a shift of the demand curve c. a movement along the supply curve d. a shift of the supply curve 14. A decrease in the number of producers will cause a. a movement along the demand curve b. a shift of the demand curve c. a movement along the supply curve d. a shift of the supply curve

Explanation / Answer

12. D

If expectation of the consumers change than demand curve will shift as demand of the consumers mirrors the consumers expectations.

13. A

Decrease in the price of hazelnut spread which is substitute of butter will lead to lowering of demand of peanut butter. Hence demand curve will shift downwards.

14. D

Shift in the number of producers will reduce the supply of peanut butter thus shifting the supply curve upwards

15. A

Decrease in the cost of produucing peanut butter will cause a movement along the demand curve as we can infer from the law of demand

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