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Which of the following would cause the demand curve for rice to shift to the left? A rise in the price of rice
Which of the following would cause the demand curve for rice to shift to the left?
A rise in the price of rice.
A blight that destroyed 75% of the rice harvest.
A report claiming that the starch in rice causes heart disease.
A tariff that doubles the price of imported spaghetti.
Expert Solution
Demand curve shifts to the left if there is an exogenous shock to the demand.This means that the demand is decreasing.
Option a: rise in price leads to movement of the demand curve.
Option b: A destruction of 70 % harvest effect the supply, not demand
Option c: Heart diseases can shift the demand to the left as it is an exogenous shock
Option d: If the price of the spaghetti doubled, spaghetti is a substitute so there is a rightward shift in the demand curve.
Thus, the right answer in this case is c.
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