Which is the correct answer? Coffee and doughnuts are complements in consumption. Suppose the economy expands so that consumer income increases, and coffee is a normal good. What impact does this change in the coffee market have on the doughnut market under a general equilibrium analysis? A. Doughnut demand shifts leftward and doughnut price and quantity decline. B. Doughnut demand shifts leftward, doughnut price declines, and doughnut quantity increases. C. Doughnut demand shifts rightward, doughnut price increases, and doughnut quantity declines. D. Doughnut demand shifts rightward and doughnut price and quantity increase.

Economics (MindTap Course List)
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ISBN:9781337617383
Author:Roger A. Arnold
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Chapter20: Consumer Choice: Maximizing Utility And Behavioral Economics
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Which is the correct answer?

Coffee and doughnuts are complements in consumption. Suppose the economy expands so that consumer income increases, and coffee is a normal good. What impact does this change in the coffee market have on the doughnut market under a general equilibrium analysis?

  • A. Doughnut demand shifts leftward and doughnut price and quantity decline.
  • B. Doughnut demand shifts leftward, doughnut price declines, and doughnut quantity increases.
  • C. Doughnut demand shifts rightward, doughnut price increases, and doughnut quantity declines.
  • D. Doughnut demand shifts rightward and doughnut price and quantity increase.
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