Movement Along the Demand Curve Due to Price Change

Steps:

• Observe that quantity demanded increased from Q1 to Q2, indicating a movement along the demand curve.
• Recall that movements along the curve result from changes in the good's own price, not other factors.
• Apply the law of demand: lower price increases quantity demanded.
• Conclude the cause is a decrease in coffee's price.

Why A is correct:

• The law of demand states that, ceteris paribus, a decrease in price leads to an increase in quantity demanded, causing the shift from Q1 to Q2.

Why the others are wrong:

• B: Rising incomes shift the entire demand curve rightward, increasing demand at every price, not just quantity along the curve.
• C: Successful advertising increases consumer preferences, shifting the demand curve rightward.
• D: Higher prices for substitutes increase demand for coffee, shifting the curve rightward.

Final answer: A