Use the Information Below to Answer the Following Questions

question 37

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.If there is an increase in the wages of farm workers who harvest coffee beans,the equilibrium quantity of coffee

• A)increases.
• B)decreases.
• C)remains the same.
• D)increases or decreases depending on the slope of the supply and demand curves.
• E)increases or decreases depending on the relative shifts of the supply and demand curves.

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Definitions:

Optimal Average Cash Balance

The ideal amount of cash that a company should hold to minimize costs associated with holding too much or too little cash.

Disbursements

Payments made by a business, usually consisting of expenses, investments, and other financial outlays.

Lower Cash Balance Limit

The minimum amount of cash that a business aims to maintain in its cash reserves to meet emergency or operational needs.

Miller-Orr Model

The Miller-Orr Model is a financial model used to manage cash flow and determine the optimal balance between holding cash versus short-term investments.