If Consumers Often Purchase Muffins to Eat While They Drink

question 133

Multiple Choice

If consumers often purchase muffins to eat while they drink their lattés at local coffee shops,what would happen to the equilibrium price and quantity of lattés if the price of muffins falls?

• A)Both the equilibrium price and quantity would increase.
• B)Both the equilibrium price and quantity would decrease.
• C)The equilibrium price would increase,and the equilibrium quantity would decrease.
• D)The equilibrium price would decrease,and the equilibrium quantity would increase.

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Definitions:

International Product Life Cycle

A theory explaining how a product matures and sales change over time on an international scale, impacting production and distribution.

Mercantilism

An economic theory that advocates for a country to export more than it imports to accumulate wealth.

Export Subsidies

Financial assistance grants provided by governments to domestic companies to encourage exports, making their products more competitively priced in the global market.

Import Restraints

Measures applied by countries to limit the quantity of goods that can be imported, such as tariffs and quotas.