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Question & Answer
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The demand curve for the related product will shift to the right.
The demand curve for the related product will shift to the left.
The demand curve for the related product will remain unchanged.
The demand curve for the related product will become perfectly elastic.
Understanding the Answer
Let's break down why this is correct
When a substitute becomes cheaper, people switch to it. Other options are incorrect because Some think a cheaper substitute makes the related product more popular; It is easy to think nothing changes when a substitute price falls.
Key Concepts
Shifts in Demand Curve
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Deep Dive: Shifts in Demand Curve
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Definition
Shifts in the demand curve occur when factors other than price influence the quantity of a product demanded at each price level. Changes in consumer income, tastes, fashion trends, and prices of related goods can shift the demand curve either outward (increase in demand) or inward (decrease in demand).
Topic Definition
Shifts in the demand curve occur when factors other than price influence the quantity of a product demanded at each price level. Changes in consumer income, tastes, fashion trends, and prices of related goods can shift the demand curve either outward (increase in demand) or inward (decrease in demand).
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