Question

We know that DVD players have seen a signifcant fall in price over recent years. We also know that this fall in price have been caused by significant decreases in the cost of producing DVD players. In terms of the supply and demand analysis this is explained by_________.

A. A shift to the left of the supply curve
B. A shift to the right of the supply curve
C. A movement along the supply curve to the left
D. A movement along the supply curve to the right
E. A shift to the right of the demand curve

Answer 1

Answer:

E. A shift to the right of the demand curve

Explanation:

Demand curve can shift to the right if income of consumers increase or price of commodity falls generally. In this case the price fell due to lower production cost. The scenario is broad enough to cause demand to shift to the right.