Question
Asked Oct 1, 2019
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Coffee and sugar are complements. If a poor sugar harvest leads to an increase in the price of sugar, there will also be?
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Expert Answer

Step 1

In economics, complementary goods are defined as those goods which are jointly/combinedly consumed by the consumers. These goods have a negative cross price elasticity of demand which means as the price of one good rises, the demand for other good will decline.

Step 2

Here, it is given that both coffee and sugar are complementary goods and there is a bad harvest of sugar which increases the price of sugar in the market. Therefore, as a...

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