For the demand curves of baby formula. Which of the following changes is likely to happen if the price of baby formula decreases?
a. a movement along the demand curve D1 from point a to point b
b. a shift of the demand curve from D2 to D1
c. a movement along the demand curve D2 from point d to point c
d. a movement from point b on the demand curve D1 to point c on the demand curve D2
e. a shift of the demand curve from D1 to D2
Answer: a. a movement along the demand curve D1 from point a to point b
Explanation: When price changes, quantity demanded changes that is there is a movement along the existing demand curve.
Therefore decrease in the price of baby formula results in increase of quantity demanded. Movement from a to b along the demand curve D1 is correct.
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