Given that milk and cookies are complements, suppose the price of flour (an ingredient in cookies) rises. What happens in the market for milk?
A) The equilibrium price and quantity rise.
B) The equilibrium price rises and the equilibrium quantity falls.
C) The equilibrium price and quantity fall.
D) The equilibrium price falls and the equilibrium quantity rises.
Ans: C) The equilibrium price and quantity fall.
Economics
You might also like to view...
What happens when there is a sudden increment or decline in the supply of a specific product which affects equilibrium?
a. Capital flight b. Economic equilibrium c. Elasticity of supply d. Supply shock
Economics
Internal economies of scale arise when the cost per unit
A) falls as the average firm grows larger. B) rises as the industry grows larger. C) falls as the industry grows larger. D) rises as the average firm grows larger. E) remains constant over a broad range of output.
Economics