Asked by Dianna Juanes on May 12, 2024
Verified
Coffee and tea are substitutes in consumption.If there is an increase in the price of coffee,assuming a positively sloped supply curve and a negatively sloped demand curve,total surplus in the tea market:
A) will increase.
B) will decrease.
C) will not change.
D) may change,but we cannot determine the change without more information.
Positively Sloped
Describes a line on a graph that moves upward as one moves from left to right, indicating a direct relationship between two variables.
Negatively Sloped
A term used in economics to describe a line on a graph that moves downwards from left to right, indicating an inverse relationship between two variables.
Total Surplus
The sum of consumer surplus and producer surplus in a market, representing the total benefits to society from trading a good or service.
- Understand the concept of substitutes and complements in consumption and their impact on surplus.
- Scrutinize the impact of variations in supply and demand on the entire surplus.
Verified Answer
Learning Objectives
- Understand the concept of substitutes and complements in consumption and their impact on surplus.
- Scrutinize the impact of variations in supply and demand on the entire surplus.
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