Coffee and Tea Are Substitutes

question 397

Multiple Choice

Coffee and tea are substitutes.Bad weather that sharply reduces the coffee bean harvest would

• A) increase consumer surplus in the market for coffee and decrease producer surplus in the market for tea.
• B) increase consumer surplus in the market for coffee and increase producer surplus in the market for tea.
• C) decrease consumer surplus in the market for coffee and increase producer surplus in the market for tea.
• D) decrease consumer surplus in the market for coffee and decrease producer surplus in the market for tea.

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Definitions:

Competitive Behavior

Actions taken by companies or individuals to gain an advantage in the market, often through innovation, market strategy, or efficiency improvements.

Robinson-Patman Act

A 1936 law intended to prevent anticompetitive practices by producers, specifically price discrimination that could harm competition.

Sherman Act

A landmark federal statute passed in 1890 aimed at maintaining competition among businesses by prohibiting monopolies, cartels, and other forms of monopolistic practices.

Unreasonably Restrain

To limit someone's freedom to act or move in a manner that is excessive or beyond what is considered reasonable.