Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
The demand for coffee will decrease
B
The demand for coffee will increase
C
The demand for coffee will remain unchanged
D
The demand for coffee will fluctuate unpredictably
Understanding the Answer
Let's break down why this is correct
Answer
When the price of muffins goes up, people may buy fewer muffins because they cost more. Since muffins and coffee are complementary goods, meaning they are often enjoyed together, this decrease in muffin sales can lead to a drop in coffee demand as well. For example, if someone usually buys a muffin and a coffee for breakfast but now finds the muffin too expensive, they might skip both. As a result, the higher price of muffins can negatively affect how much coffee people want to buy. This shows how changes in the price of one good can influence the demand for another good that is related.
Detailed Explanation
When muffins cost more, people buy fewer muffins. Other options are incorrect because Some might think that if muffins are more expensive, people will buy more coffee to enjoy with them; This answer suggests that the price change won't affect coffee sales.
Key Concepts
Complementary Goods
Demand Elasticity
Cross-Price Elasticity
Topic
Complementary Goods and Demand
Difficulty
easy level question
Cognitive Level
understand
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