Thank you for visiting Campus Coffee Company increased the price of their muffins and cookies from 1 75 last year to 2 00 at the beginning of the Fall. This page is designed to guide you through key points and clear explanations related to the topic at hand. We aim to make your learning experience smooth, insightful, and informative. Dive in and discover the answers you're looking for!
Answer :
A) True. The statement is true because an increase in price typically leads to a decrease in demand due to the law of demand.
In this case, the higher price of muffins and cookies would lead customers to purchase them less frequently. When the price of a good increases, according to the law of demand, demand for that good typically decreases, all else being equal.
In this case, the increase in the price of muffins and cookies from $1.75 to $2.00 would likely lead to a decrease in demand for these items, as customers may find them less affordable or less appealing at the higher price.
Step-by-Step Explanation:
Price Increase: The price of muffins and cookies increased from $1.75 to $2.00.
Law of Demand: According to the law of demand, as the price of a product increases, the quantity demanded generally decreases if all other factors remain constant.
Consumer Reaction: Consumers may purchase fewer muffins and cookies due to the higher price, leading to a decrease in demand.
Example:
Imagine going to your favorite coffee shop and finding out the price of your favorite baked goods increased by 25 cents. You might decide to buy them less often or look for alternatives at a lower price, reflecting the impact of the price increase on demand.
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Rewritten by : Jeany
