Coffee and Sugar Are Complements

question 390

Multiple Choice

Coffee and sugar are complements. If a poor sugar harvest leads to an increase in the price of sugar, there will also be

• A) an increase in the price of coffee.
• B) a decrease in the price of coffee.
• C) a rightward shift in the demand curve for coffee.
• D) a leftward shift of the supply curve of coffee.

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Definitions:

Elastic

Describes a situation in economics where the demand or supply for a good or service significantly changes in response to a change in price.

Substitute Goods

Products or services that can be used in place of one another, with their demand being inversely related: as the price of one rises, the demand for the other increases.

Margarine

A butter substitute made from vegetable oils or animal fats, often used in cooking or as a spread.

Inelastic

A characteristic of a good or service whose quantity demanded or supplied changes by a smaller percentage than changes in price.