Multiple Choice
Peaches and cream are complements.When the price of peaches falls and the price of raw milk (used to make cream) rises,
A) the equilibrium price of cream rises and the equilibrium quantity of cream might rise or fall.
B) the equilibrium price of cream falls and the equilibrium quantity of cream might rise or fall.
C) the equilibrium price of cream falls and the equilibrium quantity of cream falls.
D) the equilibrium price of cream falls and the equilibrium quantity of cream rises.
Correct Answer:
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