If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos falls?
a. Both the equilibrium price and quantity would increase.
b. Both the equilibrium price and quantity would decrease.
c. The equilibrium price would increase, and the equilibrium quantity would decrease.
d. The equilibrium price would decrease, and the equilibrium quantity would increase.
b
You might also like to view...
The large budget deficits of the early 1990s resulted in large current account deficits
Indicate whether the statement is true or false
Why might economists prefer private ownership of monopolies over public ownership of monopolies?
With a flexible exchange-rate system, what determines the exchange rate between two countries?
(A) Supply and demand. (B) The day-to-day changes in one currency. (C) Inflation and interest rates. (D) The value of gold.
The effect of spreading out the fixed costs outweighing the effect of diminishing returns is illustrated by the ________ average cost curve ________.
A. long-run; decreasing B. long-run; increasing C. short-run; decreasing D. short-run; increasing