if the price of the frozen yogurt increase the demand for the ice cream will increase too. Does the price for the ice crease raise or fall?
If the price of frozen yogurt increases, it is expected that the demand for ice cream will increase as well. However, this does not necessarily mean that the price of ice cream will also increase.
The relationship between the price of a good and its demand is known as the "law of demand." According to this law, when the price of a good increases, its demand tends to decrease, and vice versa. In this case, as the price of frozen yogurt increases, some consumers who were previously purchasing frozen yogurt may switch to ice cream instead. This increase in demand for ice cream could lead to an upward pressure on the price of ice cream.
Whether the price for ice cream will ultimately increase or decrease depends on other factors such as the availability of substitutes, production costs, and overall market conditions. It is possible that suppliers of ice cream may choose to increase the price to capitalize on the increased demand, or they may decide to keep the price stable to attract the new customers. Therefore, without more information about market dynamics and other factors, it is difficult to determine whether the price for ice cream will rise or fall.
To determine the effect of a price increase in frozen yogurt on the demand for ice cream, we need to consider the concept of substitute goods. When two goods are substitutes, an increase in the price of one will generally lead to an increase in the demand for the other.
In this case, frozen yogurt and ice cream are considered substitutes because they are similar dessert options. So, if the price of frozen yogurt increases, people may choose to purchase ice cream instead, causing the demand for ice cream to increase.
Regarding the price of ice cream, since the increase in demand can be attributed to the price increase in frozen yogurt, it is likely that the price of ice cream will also increase. This is because with higher demand, producers may raise the price in response to the increased consumer interest. However, other factors such as production costs and market competition can also influence pricing, so a price increase is not guaranteed but is a possibility.
In summary, if the price of frozen yogurt increases and it leads to an increase in the demand for ice cream, the price of ice cream may also increase, but this will depend on various factors within the market.