ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Cereal and milk are complementary goods. An increase in the price of breakfast cereal would cause the demand for milk to decrease, shifting the demand curve to the left.

Detailed explanation-2: -Complementary goods have a negative cross-price elasticity of demand. This means that an increase in the price of one good causes a decrease in the demand for the other good. Therefore, as the price of milk increases and cereal is a complement good to milk, then we would expect the demand for cereal to decrease.

Detailed explanation-3: -Answer and Explanation: The correct option is C. A decrease in the price of feed given to dairy cows.

Detailed explanation-4: -A movement along the demand curve: An increase in the price of cereals will cause an upward movement along the demand curve. As a result, the quantity demanded of reals will decline. Shift the demand curve: A decrease in income will cause a decline in demand for cereals.

Detailed explanation-5: -Demand Curve Shifts Right The curve shifts to the right if the determinant causes demand to increase. This means more of the good or service are demanded even though there’s no change in price. When the economy is booming, buyers’ incomes will rise. They’ll buy more of everything, even though the price hasn’t changed.