Chicken and fish are assumed to be substitutes for each other. If the price of chicken increases, demand for fish will...A. Decrease and the demand curve for fish will shift to the leftB. Increase and the demand curve for fish will shift to the rightC. Increase or decrease, but there will be no change in demand for chickenD. Not change but there will be a movement along the demand curve for fish
Question
Chicken and fish are assumed to be substitutes for each other. If the price of chicken increases, demand for fish will...A. Decrease and the demand curve for fish will shift to the leftB. Increase and the demand curve for fish will shift to the rightC. Increase or decrease, but there will be no change in demand for chickenD. Not change but there will be a movement along the demand curve for fish
Solution
The correct answer is B. Increase and the demand curve for fish will shift to the right.
Here's why:
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Chicken and fish are assumed to be substitutes for each other. This means that if the price of one goes up, consumers will typically start buying more of the other to compensate.
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If the price of chicken increases, people may find it too expensive and start looking for alternatives. In this case, fish is the substitute good.
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As a result, the demand for fish will increase because it is now relatively cheaper compared to chicken.
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In terms of the demand curve, an increase in demand is represented by a shift to the right. This is because at each price level, consumers are now willing to buy more fish than before.
So, when the price of chicken increases, the demand for fish will increase and the demand curve for fish will shift to the right.
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