Question

When quantity demanded decreases in response to a change in price:

a. the demand curve shifts to the right.
b. the demand curve shifts to the left.
c. there is a movement down along the demand curve.
d. there is a movement up along the demand curve.
e. the supply curve shifts to the right.

Answer 1

A decrease in demand, evidenced by fewer quantities demanded at each price level, results in the demand curve shifting to the left, not up or down along the curve, nor does it affect the supply curve.

Step-by-step explanation:

When quantity demanded decreases in response to a change in price, the entire demand curve shifts to the left, which reflects fewer quantities demanded at each price level. Therefore, the correct answer to the question is b. the demand curve shifts to the left. This leftward shift indicates a decrease in demand across all price points. It's distinct from a movement along the demand curve, which would happen only if the price changes but the demand itself remains constant.