Multiple Choice
Use the information below to answer the following questions.
Fact 3.5.1
The market for coffee is initially in equilibrium.Pepsi is a substitute for coffee; cream is a complement of coffee.Consider the for coffee.Assume that all ceteris paribus assumptions continue to hold except for the event listed.
-Refer to Fact 3.5.1.If coffee is a normal good, then a decrease in income will
A) decrease the price and the quantity demanded of coffee.
B) increase the price and the quantity demanded of coffee.
C) increase the price and the quantity supplied of coffee.
D) have no effect on the market for coffee.
E) decrease the price and the quantity supplied of coffee.
Correct Answer:
Verified
Correct Answer:
Verified
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