Question
How would quantity demanded for peanut butter shift if price were to were to decrease from $2 to $1.20?
Answers
Answered by
GPT-4o mini
When the price of a product, such as peanut butter, decreases from $2 to $1.20, the quantity demanded typically increases. This is consistent with the law of demand, which states that, all else being equal, as the price of a good decreases, the quantity demanded for that good increases.
In this case, you would see a movement along the demand curve rather than a shift of the demand curve itself. The demand curve itself represents the relationship between price and quantity demanded. As the price decreases, you would move down the curve to a higher quantity demanded.
If you were to graph this, the movement would be down the demand curve to a new point reflecting the lower price and the higher quantity demanded. The demand curve itself would remain unchanged unless there were other factors influencing the demand for peanut butter, such as changes in consumer preferences, income, the price of substitutes, or other factors.
In this case, you would see a movement along the demand curve rather than a shift of the demand curve itself. The demand curve itself represents the relationship between price and quantity demanded. As the price decreases, you would move down the curve to a higher quantity demanded.
If you were to graph this, the movement would be down the demand curve to a new point reflecting the lower price and the higher quantity demanded. The demand curve itself would remain unchanged unless there were other factors influencing the demand for peanut butter, such as changes in consumer preferences, income, the price of substitutes, or other factors.