Related to the Economics in Practice on page 69: Consumption of coffee has been on the rise in China. Since tea and coffee are generally considered ________, an increase in the price of coffee should ________ the demand for tea, ceteris paribus.

Question

Quizplus · Accepted Answer

Tea and coffee are substitutes, which means that as the price of coffee increases, consumers will switch to consuming more tea instead. Therefore, the demand for tea should increase, ceteris paribus.

Related to the Economics in Practice on Page 69: Consumption