When the price of wine decreases, the demand curve for wine:1 pointStays the sameShifts to the rightShifts to the leftRotates outwardRotates inward

Understanding the Demand Curve Shift

1. Break Down the Problem

   • Identify the relationship between price and demand.
   • Determine how a decrease in price affects the demand curve.

2. Relevant Concepts

   • The law of demand states that, all else being equal, as the price of a good decreases, the quantity demanded increases.
   • A shift in the demand curve refers to a change in demand at all price levels, while movement along the demand curve refers to a change in quantity demanded due to a price change.

3. Analysis and Detail

   • When the price of wine decreases, consumers tend to buy more wine because it is cheaper.
   • However, this does not shift the demand curve itself; instead, it causes a movement along the demand curve to a higher quantity demanded at a lower price.
   • The demand curve remains unchanged as the underlying factors influencing demand (like consumer preferences, incomes, etc.) have not altered.

4. Verify and Summarize

   • Since the demand curve reflects the relationship between price and quantity demanded, a price decrease causes a movement along the curve, not a shift.
   • Thus, the correct interpretation is that the demand curve for wine stays the same.

Final Answer

The demand curve for wine stays the same.