If the price of a cup of Dunkin' Donuts coffee increases while the price of a Starbucks latte is unchanged, we expect the number of lattes purchased at Starbucks to _____ as some consumers _____.
A) increase; switch from Dunkin' Donuts coffee to Starbucks lattes.
B) decrease; switch from Dunkin' Donuts coffee to Starbucks lattes.
C) decrease; have less money to spend on caffeinated beverages.
D) decrease; switch from Starbucks lattes to Dunkin' Donuts coffee.

Question

Quizplus · Accepted Answer

When the price of a substitute good (Dunkin' Donuts coffee) increases, consumers are likely to switch to the alternative (Starbucks lattes) if the price of the alternative remains unchanged, leading to an increase in the quantity of the alternative purchased.

If the Price of a Cup of Dunkin' Donuts Coffee