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:

Internal Stimulus

Psychological or emotional factors within an individual that trigger a desire or need, prompting them to make a purchase or decision.

Low-involvement Purchase

Buying decisions made by consumers with minimal research and consideration as the product is often inexpensive and perceived as low risk.

Forethought

The act of thinking and planning activities or events in advance, demonstrating anticipation and careful consideration.

Low-involvement Products

Goods or services that require minimal thought and effort from consumers before purchase due to their low cost or risk, such as everyday household items.