Use the Information Below to Answer the Following Questions

question 128

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 market for coffee.Assume that all ceteris paribus assumptions continue to hold except for the event listed.
-Refer to Fact 3.5.1.An increase in the price of Pepsi,a substitute for coffee will

• A)increase the price and the quantity demanded of coffee.
• B)increase the price and the quantity supplied of coffee.
• C)decrease the price and the quantity demanded of coffee.
• D)decrease the price and the quantity supplied of coffee.
• E)cause none of the above.

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Definitions:

Consumed

Utilized or used up completely, typically referring to resources, products, or services that have been utilized by end-users.

Mode of Transportation

The method or means by which people, materials, and goods are moved from one place to another, such as by land, air, sea, or rail.

Cargo

Goods or produce transported, generally for commercial gain, by ship, aircraft, train, or truck.

Expensive

An attribute of goods or services characterized by a high price point, often due to quality, scarcity, or brand reputation.