Final answer:
The closure of a large factory leads to a decrease in incomes, which causes demand for non-essential goods like peaches to decrease, indicating a leftward shift in the demand curve where less quantity is demanded at every price level.
Step-by-step explanation:
When the incomes of a city decrease due to events such as the closing of a large factory, this economic slowdown will likely affect the demand for goods like peaches in the local grocery store. Since people have less income to spend, they are likely to reduce their purchases of non-essential goods such as peaches.
In economics, this situation is described as a decrease in demand (D), which means the entire demand curve shifts to the left. This shift indicates that at every price level, the quantity demanded (Qd) of peaches would be lower than before. Hence, the correct answer is (a) Demand (D) decreases.