Coffee and Tea Are Substitutes in Consumption

question 158

Multiple Choice

Coffee and tea are substitutes in consumption.If there is an increase in the price of coffee,assuming a positively sloped supply curve and a negatively sloped demand curve,total surplus in the tea market:

• A)will increase.
• B)will decrease.
• C)will not change.
• D)may change,but we cannot determine the change without more information.

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The practice, often used in the travel and hospitality industry, of accepting more reservations than there is available capacity, based on predictions of last-minute cancellations.