Suppose the demand for fabric softener can be described as Q^D = 800 - P - P_D, where Q^D is the quantity of fabric softener demanded, P is the price of fabric softener, and P_D is the price of laundry detergent. Suppose that the price of detergent is initially 10 but increases to 15. The new equation for the demand of fabric softener is: A) 785 - P, and demand has shifted to the left. B) 785 - P, and demand has shifted to the right. C) 815 - P, and demand has shifted to the left. D) 815 - P, and demand has shifted to the right.

Question

Quizplus · Accepted Answer

The initial equation is 800 - P - P_D. With the price of detergent increasing from 10 to 15, the term P_D increases by 5, leading to a decrease in the demand equation to 785 - P, indicating a leftward shift in demand.

Suppose the Demand for Fabric Softener Can Be Described as QD

Suppose the Demand for Fabric Softener Can Be Described as Q^D