Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Complements
B
Substitutes
C
Unrelated goods
D
Perfect substitutes
Understanding the Answer
Let's break down why this is correct
Answer
When the price of coffee goes up, people might buy less coffee and look for other drinks instead. If more people start buying tea because coffee is more expensive, it shows that coffee and tea are related in a specific way. In economics, we say that these two goods are substitutes. This means that when the price of one goes up, the demand for the other can increase. For example, if a cup of coffee costs $5 and suddenly rises to $7, some coffee drinkers might switch to tea, which could still be $3, leading to higher tea sales.
Detailed Explanation
When coffee gets more expensive, people look for other options. Other options are incorrect because Some might think that if one item costs more, people buy more of another; It's easy to think that if two items don't affect each other, they are unrelated.
Key Concepts
Substitutes
Topic
Cross-Price Elasticity of Demand
Difficulty
easy level question
Cognitive Level
understand
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