Let's analyze the graph step by step: ### Step 1: Identify the Axes - The vertical axis is labeled **Price**. - The horizontal axis is labeled **Quantity**. ### Step 2: Identify the Curves - There are two demand curves: **D₁** (original) and **D₂** (new). - The arrows indicate a shift from **D₁** to **D₂**, meaning the entire demand curve has moved to the right. ### Step 3: Interpret the Shift - A **rightward shift** of the demand curve means that at every price, the quantity demanded has **increased**. ### Step 4: Match the Shift to the Options - **A: Increase in supply** – This would be a rightward shift of the supply curve, not shown here. - **B: Decrease in demand** – This would be a leftward shift of the demand curve, not shown here. - **C: Decrease in supply** – This would be a leftward shift of the supply curve, not shown here. - **D: Increase in demand** – This matches a rightward shift of the demand curve as seen in the graph. ### Step 5: Final Answer **The graph represents an:** **D: Increase in demand** --- **Explanation:** The demand curve shifts to the right from D₁ to D₂, indicating at every price level more quantity is demanded. This is the definition of an "increase in demand."