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10-03-2020
Business

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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 _________.

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zunesyed zunesyed

17-03-2020

Answer:

Will increase

Explanation:

Substitutes are the goods which have high elastic demand or positive cross elasticity of demand. An increase in price substantially affects the demand for a substitute good. For example, if tea and coffee are substitutes, an increase in the price of coffee will increase the demand for tea and the overall surplus in the team market.

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