Asked by Christyon Pulley on May 09, 2024
Verified
(Figure: Demand for Coconuts) Use Figure: Demand for Coconuts.If fish is a substitute good for coconuts and the price of fish increases,it will be represented in the figure as a:
A) shift from D1 to D2
B) movement from point A to point B
C) shift from D1 to D3
D) movement from point B to point E
Substitute Good
A product or service that can be easily replaced with another by consumers, often because it performs a similar function.
Price of Fish
The cost for which fish is sold in the market, influenced by factors such as species, availability, demand, and fishing costs.
- Understand the effect of substitutes and complements on market trends.
- Evaluate the influence of technological developments and preference changes on the state of market equilibrium.
Verified Answer
CK
Cameron KlingenerMay 10, 2024
Final Answer :
A
Explanation :
When the price of a substitute good (like fish) increases, consumers will tend to buy more of the good in question (coconuts in this case), leading to an increase in its demand. This is represented by a rightward shift in the demand curve, from D1 to D2.
Learning Objectives
- Understand the effect of substitutes and complements on market trends.
- Evaluate the influence of technological developments and preference changes on the state of market equilibrium.
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