refer to the diagrams above. assume that the graphs in this figure represent the demand and supply curves…

refer to the diagrams above. assume that the graphs in this figure represent the demand and supply curves for bicycle helmets. which panel best describes what happens in this market if there is a substantial increase in the price of bicycles? a. panel (b) b. panel (a) c. panel (c) d. panel (d)

refer to the diagrams above. assume that the graphs in this figure represent the demand and supply curves for bicycle helmets. which panel best describes what happens in this market if there is a substantial increase in the price of bicycles? a. panel (b) b. panel (a) c. panel (c) d. panel (d)

Answer

Brief Explanations:

Bicycles and bicycle - helmets are complementary goods. When the price of bicycles increases, the demand for bicycles decreases. Since people buy fewer bicycles, the demand for bicycle - helmets also decreases. A decrease in demand is represented by a left - ward shift of the demand curve from $D_1$ to $D_2$. Panel (d) shows a left - ward shift of the demand curve while the supply curve remains unchanged.

Answer:

D. Panel (d)