Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Demand for muffins will decrease
B
Demand for muffins will increase
C
Demand for muffins will remain unchanged
D
Demand for muffins will fluctuate randomly
Understanding the Answer
Let's break down why this is correct
Answer
When the price of coffee goes up, many people may buy less coffee because it costs more. Coffee and muffins are complementary goods, which means they are often enjoyed together. If people are drinking less coffee, they will likely also buy fewer muffins since they usually have them together. For example, if someone used to buy a muffin with their coffee every morning but now finds coffee too expensive, they might skip the muffin as well. Overall, the demand for muffins is likely to decrease because of the higher coffee prices.
Detailed Explanation
When coffee costs more, people might buy less coffee. Other options are incorrect because Some might think that if coffee is more expensive, people will buy more muffins to enjoy with it; This choice suggests that the price change won't affect muffin sales.
Key Concepts
Complementary Goods
Demand Relationships
Cross-Price Elasticity
Topic
Complementary Goods and Demand
Difficulty
medium level question
Cognitive Level
understand
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