What happens to the demand curve for milk when cereal is on sale?

When cereal is on sale, it becomes more attractive to consumers and is likely to increase its consumption. Milk and cereal are often considered complementary goods because they are commonly consumed together. When the price of cereal decreases, the quantity demanded for cereal increases, which in turn boosts the demand for milk.

This change occurs because more people will want to purchase milk to enjoy with their cereal. Therefore, the demand curve for milk shifts to the right, indicating an increase in demand at all price levels. This shift reflects the idea that as more cereal is bought, there will be a corresponding increase in the quantity of milk demanded, exemplifying the relationship between complementary goods.

In contrast, other options suggest different scenarios: a left shift would imply a decrease in demand, an unchanged demand curve indicates no impact from the sale of cereal, and perfect elasticity suggests a highly responsive demand to price changes, which doesn’t apply here. Thus, the correct outcome is a rightward shift in the demand curve for milk.