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Discussion

Which of the following will shift demand curve of alcohol to the left?

  • A.Health research linking alcohol with heart disease
  • B.A decrease in indirect tax on alcohol
  • C.An increase in real income
  • D.A successful advertising campaign encouraging alcohol consumption

Answer: A

A demand curve shifts to the left when demand falls at every price. Research linking alcohol with heart disease changes tastes against it and reduces demand. A decrease in indirect tax lowers the price and moves along the curve or raises supply, a rise in real income raises the demand for a normal good, and a successful advertising campaign increases demand. The answer is option A. The other three changes would either raise demand or move the market along the curve, and so they cannot shift it to the left.

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