What effect does an increase in the price of hamburgers have on the demand for hot dogs?

An increase in the price of hamburgers typically leads to a shift to the right in the demand for hot dogs, illustrating a fundamental concept in economics known as the substitution effect. When the price of one good (in this case, hamburgers) rises, consumers often seek alternatives that provide similar utility at a lower cost. Hot dogs serve as a substitution for hamburgers, so as hamburgers become more expensive, people are more likely to purchase hot dogs instead. This increased interest or preference for hot dogs due to the higher price of hamburgers results in a rightward shift in the demand curve for hot dogs, indicating that at every price level, consumers are now willing to buy more hot dogs than before the price increase.

The other options reflect different scenarios but do not accurately depict the relationship between the price increase of hamburgers and the demand for hot dogs. The demand for hot dogs does not shift left, remain unchanged, or become perfectly inelastic in response to a price increase of hamburgers.