What is the likely effect on the demand curve for hot dogs when the price of hamburgers increases?

• A. Shift left
• B. Shift downward
• C. Shift right
• D. No change

Answer: (C)

When the price of hamburgers increases, hot dogs are likely to become a more attractive substitute for consumers. Since hot dogs and hamburgers often serve similar purposes in meals and social gatherings, an increase in the price of hamburgers can lead to more people opting for hot dogs instead.

As a result, the demand for hot dogs is expected to increase, prompting the demand curve to shift to the right. This indicates that at each price level, consumers are willing to purchase more hot dogs than they were before, reflecting the substitution effect between the two products.