Question

A decrease in the price of spaghetti is likely to cause:Multiple Choicea a) movement to the right along the demand curve for spaghetti. b) an inward shift of the demand curve for spaghetti. c) an outward shift of the demand curve for spaghetti. d) a movement to the left along the demand curve for spaghetti.

Answer 1

The correct answer is option a.

Step-by-step explanation:

According to the law of demand, the price of a commodity and its quantity demanded are inversely related. So they change in opposite directions. As the price o a commodity decreases, it becomes cheaper. The purchasing power of the consumer increases and he is able to afford more of the product.

A decrease in the price of spaghetti will make it cheaper. People will be able to afford more spaghetti. As a result, the quantity demanded of spaghetti will increase. This will be indicated by a rightward movement on the same demand curve.