If Consumers View Cappuccinos and Lattés as Substitutes,what Would Happen

question 141

Multiple Choice

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.

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Definitions:

Corporation

A legal entity separate from its owners, providing them with limited liability, and which can own property, enter contracts, and sue or be sued.

Contract Law

The branch of law that deals with the creation, enforcement, and termination of contracts between parties.

Sole Proprietor

An individual who owns and operates a business by themselves, bearing full responsibility for its debts and legal actions.

Limited Liability

A legal structure where a person's financial responsibility for a company's debts and obligations is restricted to a fixed amount, typically their investment.