Use the graph to answer the question that follows.

Question

Graph has quantity along the horizontal axis and price along the vertical axis. A downward sloping line connects the axes and is labeled D1. A second downward-sloping line, labeled D2, is to the right of D1.

Which of the following could explain the shift from D1 to D2?

A decrease in product price
A decrease in people’s overall incomes
An increase in preference for a different brand
An increase in the number of buyers for the product

Answer 1

The shift from D1 to D2 represents an increase in demand for the product. This could be explained by an increase in the number of buyers for the product, as more consumers would lead to a higher quantity demanded at every price level.

So, the correct option that could explain the shift from D1 to D2 is:

An increase in the number of buyers for the product.

The other options would not lead to a demand increase:

• A decrease in product price would result in an increase in quantity demanded along the same demand curve (D1) rather than a shift to a new curve (D2).
• A decrease in people’s overall incomes would typically lead to a decrease in demand for normal goods.
• An increase in preference for a different brand would likely lead to a decrease in demand for this particular product.