The graph above shows demand pivoting outward. Which of the following statements is correct?

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BlackTom AI · Accepted Answer

The question describes a graph where demand pivots outward. To analyze the statement, we first acknowledge what a pivot outward implies: the whole demand set shifts to the right, indicating higher quantity demanded at each price for the relevant groups.

If the answer choices included a claim like: "Demand for low willingness to pay buyers increased the most," we would evaluate it by asking which segment saw the largest shift to the right. 
- For the correct option (the one that matches the graph): If the outward pivot is strongest for the low willingness-to-pay (low WTP) buyers, that means their quantity demanded increased more than for other buyers at each price. In that case, the statement is accurate because the graph indicates the area corresponding to low-WTP buyers experiences the greatest rightward shift.
- For incorrect options (if provided): Each would be wrong if it asserts a greater increase for a group not showing the largest shift on the graph, or if it claims a decrease or no change in demand for any group, or if it suggests the pivot only affects one subgroup while leaving others unaffected. The core misconception would be interpreting a pivot outward as uniform across all groups or misidentifying which subgroup’s demand shifted most.

In sum, the correctness hinges on which subgroup’s demand curve experiences the largest rightward shift in the outward-pivot graph. If the graph indeed shows the largest shift among low willingness-to-pay buyers, then the statement is correct; otherwise, it would be incorrect. The key concept is that an outward pivot shifts the aggregate demand, but the relative magnitudes across subgroups determine which specific subgroup increased the most.

QAMO 2010-004 Fall 2025 Unit 2: Demand -- Short Problems

The graph above shows demand pivoting outward. Which of the following statements is correct?

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QAMO 2010-004 Fall 2025 Unit 2: Demand -- Short Problems

The graph above shows demand pivoting outward. Which of the following statements is correct?

View Explanation

Log in for full answers

Similar Questions

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Figure 4-3 Refer to Figure 4-3. The shift from Da to Db is called

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