Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Increase
B
Decrease
C
Stay the same
D
Become elastic
Understanding the Answer
Let's break down why this is correct
Answer
When the price of coffee increases, people may choose to buy less coffee because it costs more. Since tea is a substitute for coffee, this means that some of those coffee drinkers might start buying more tea instead. As a result, the demand for tea is likely to increase. For example, if a cup of coffee goes from $3 to $4, someone who usually drinks coffee might decide to buy tea instead, thinking it’s a better deal. This situation shows how the prices of substitute goods can affect each other in the market.
Detailed Explanation
When coffee gets more expensive, people look for cheaper options. Other options are incorrect because Some might think that if coffee is expensive, people will buy less tea; It's easy to think that demand stays the same.
Key Concepts
demand elasticity
Topic
Substitutes and Complements in Economics
Difficulty
easy level question
Cognitive Level
understand
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