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.

Question

Quizplus · Accepted Answer

Since coffee and tea are substitutes in consumption, an increase in the price of coffee will cause consumers to switch to tea, leading to an increase in the demand for tea. As a result, the equilibrium price and quantity of tea will increase. This increase in quantity and price will lead to an increase in total surplus in the tea market. Therefore, the correct answer is (A) "will increase."

Coffee and Tea Are Substitutes in Consumption