Question

Lise the information below to answer the following questions. Fact 3.5.1 The market for coffee is initially in equilibrium. Pepsi is a substitute for coffee; cream is a complement of coffee. Consider the market for coffee. Assume that all ceteris paribus assumptions continue to hold except for the event listed. 14) Refer to Fact 3.5.1. The price of cream falls. Simultaneously, there is an increase in the wages of farm workers who harvest coffee beans. The equilibrium quantity of coffee A) increases or decreases depending on the slope of the supply and demand curves. B) remains the same. C) increases, decreases, or remains the same depending on the relative shifts of the supply and demand curves. D) decreases. E) increases.