Assertion (A): A rise in the price of tea, a substitute for coffee, raises the equilibrium price of coffee.
Reason (R): Dearer tea increases the demand for coffee.

Both A and R are true, and R is the correct explanation of A.Correct answerYour answerBoth A and R are true, but R is not the correct explanation of A.Correct answerYour answerA is true, but R is false.Correct answerYour answerA is false, but R is true.Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

Both are true, and R explains A: higher demand for coffee with supply unchanged raises its price.

Concept: Related goods and equilibrium
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsWhen demand or supply shifts

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Ten questions from Market Equilibrium & Price Controls, at your own pace.

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Ten questions from Market Equilibrium & Price Controls, at your own pace.

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Assertion (A): A rise in the price of tea, a substitute for coffee, raises the equilibrium price of coffee.Reason (R): Dearer tea increases the demand for coffee.

Explanation

Assertion (A): A rise in the price of tea, a substitute for coffee, raises the equilibrium price of coffee.
Reason (R): Dearer tea increases the demand for coffee.