Consider the coffee market A fall in the wages paid to those
Consider the coffee market. A fall in the wages paid to those harvesting coffee beans AND an increase in the price of donuts (a known complement to coffee) will definitely:
| Increase the equilibrium price of coffee. |
Solution
Answer is Decrease in Equilibrium price of coffee.
Explanation:
The Fall on wages means fall in the cost of input, then the supply will increase and curve will shift to the right.
Increase in price of donuts, a complimentary good will decrease the demand, curve will shift to the left.
Both these situations will result in decrease in equilbrium price.
