Advertisements
Advertisements
Question
What will be the effect on demand for tea, if the price of coffee falls?
Advertisements
Solution
If the price of coffee decreases, so will the demand for tea, since tea and coffee are substitute items. When the price of coffee falls, consumers eat less tea and more coffee. Thus, tea demand will decrease.
APPEARS IN
RELATED QUESTIONS
Identify the factor that affects market demand from the options below:
The wide gap between the rich and poor with reference to income highlights ______ determinant of the market demand.
A substitute good is a good:
What will be the effect on demand for cars, if petrol becomes expensive?
Explain any four factors which determine the market demand.
State 2 types of related goods.
Define substitute goods.
Give two examples of substitute goods.
Define complementary goods.
Give two examples of complementary goods.
