Question

Consider the market for caramel and butterscotch ice cream toppings. For each price change, identify the...

Consider the market for caramel and butterscotch ice cream toppings. For each price change, identify the likely effect on the demand curve for caramel topping.

Drag each item on the left to its matching item on the right.

The demand for caramel topping will decrease.

The demand for caramel topping will increase.

The demand curve for caramel topping will remain the same.

The price of butterscotch topping increases.SELECT A LABELThe demand for caramel topping will decrease.The demand for caramel topping will increase.The demand curve for caramel topping will remain the same.

The price of caramel topping decreases.SELECT A LABELThe demand for caramel topping will decrease.The demand for caramel topping will increase.The demand curve for caramel topping will remain the same.

The price of ice cream increases.SELECT A LABELThe demand for caramel topping will decrease.The demand for caramel topping will increase.The demand curve for caramel topping will remain the same.

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Homework Answers

Answer #1

1. The price of butterscotch topping increases. - The demand for caramel topping will increase.
(Toppings are substitutes so as price of butterscotch topping increases, demand for caramel topping will increase.)

2. The price of caramel topping decreases. - The demand curve for caramel topping will remain the same.
(Due to a change in the price of the product, its demand curve do not change.)

3. The price of ice cream increases. - The demand for caramel topping will decrease.
These two are complements. So, as price of ice cream increases, its demand decreases and demand for caramel topping also decreases.)

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