How Will an Increase in the Price of Coffee Affect

question 30

Multiple Choice

How will an increase in the price of coffee affect the market for cocoa, a substitute good?

• A) The supply of cocoa will increase, leading to a reduction in the price of cocoa.
• B) The supply of cocoa will decrease, leading to an increase in the price of cocoa.
• C) The demand for cocoa will increase, leading to an increase in the price of cocoa.
• D) The demand for cocoa will decrease, leading to a reduction in the price of cocoa.

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Definitions:

Composite Units

A measure used in cost accounting to group heterogeneous products or services into a single unit for costing purposes.