ESNQUIZITIVE Chapter 3 The Market at Work Supply and Demand

ES?NQUIZITIVE Chapter 3: The Market at Work: Supply and Demand Question Confidence I think I know it Page 79 3.2. What determines demand? You can gain or lose up to 60 points on this Consider the market for caramel and butterscotch ice cream toppings. For each price change, identify the likely effect on the demand curve for caramel topping 1030. Drag each item on the left to its matching item on the right. The demand curve for caramel topping will remain the same. The price of butterscotch topping increases. Current Grade . The demand for caramel topping will decrease 096 tou must answer at leant I more The price of caramel topping decreases. The demand for caramel topping will The price of ice cream increases. ncrease

Solution

1) The price of butterscotch topping increases

Solution: The demand for caramel topping will increase.

Explanation: Other things remaing the same, when price of butterscotch topping rises, people will substitute it to caramel topping thus it\'s demand will increase

2) The price of caramel topping decreases.

Solution: The demand curve for caramel topping will remain the same.

Explanation: The price of caramel topping falls the demand curve for caramel topping will remain unchanged

3) The price of ice cream increases

Solution: The demand for caramel topping will decrease

Explanation: When price of ice cream increases people will make less demand and as s result the complementary products demand will also decrease