Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Demand for cream will increase
B
Demand for cream will decrease
C
Demand for cream will remain unchanged
D
Demand for cream will become elastic
Understanding the Answer
Let's break down why this is correct
Answer
When coffee becomes cheaper, more people buy it, so the overall coffee consumption rises. Cream is used together with coffee, so the extra coffee buyers will also want more cream to go with it. Because more coffee is bought, the demand curve for cream shifts to the right, meaning the quantity demanded of cream increases at each price. For example, if the coffee price falls from $3 to $2, a coffee shop might see coffee sales jump from 100 cups to 150 cups, and the shop would likely need to add cream to serve the extra 50 cups. Thus, a price drop in coffee boosts the demand for its complementary good, cream.
Detailed Explanation
When coffee is cheaper, more people buy it. Other options are incorrect because Some think a lower coffee price means people spend less overall, so they buy less cream; It is easy to think that a price change only affects the good itself.
Key Concepts
determinants of demand
complementary goods
Topic
Shifts in Demand Curve
Difficulty
medium level question
Cognitive Level
understand
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