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28 March, 19:30

Suppose there are seven coffee shops located on the same busy street. Iftwo of the coffee shops close, which of the following will occur, holding all else fixed? Correct Answer (s) Drag appropriate answer (s) here The supply of coffee will increase, since the remaining shops will sell more than before The supply of coffee will d The demand for coffee will decrease. The price of coffee will increase

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  1. 28 March, 22:09
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    A. he supply of coffee will increase, since the remaining shops will sell more than before.

    Explanation:

    Seven coffee shops in one busy street exhibits makes it saturated, therefore, forces of demand and supply will determine sales. When two shops are closed, it implies that there will be less competition and the remaining shops will sell more coffee. Customers would still demand coffee which will lead to more sale for the remaining stores. This makes choice A correct.
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