Discussion
Other things remaining constant, if a competitor of commodity X carries out a successful advertisement campaign, the demand curve for X shall ................... .
Answer: A
The demand curve for X shall shift to the left.
A successful advertisement campaign by a competitor draws buyers towards the rival product, so at every price fewer units of X are demanded. A fall in demand at every price is shown by a leftward shift of the whole demand curve. Its own price has not changed, so this is not a movement along the curve.
A rightward shift would mean higher demand for X. The demand curve does not become positively sloping or vertical because of a rival's advertising; its slope reflects the law of demand.
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