Popcorn and coke are complements because the are often enjoyed together. When the price of coke rises, what happens to the supply, demand, quantity supplied, quantity demanded, and the price in the market for popcorn?
What are your thoughts about these questions?
To determine the effects of a rise in the price of coke on the market for popcorn, we need to analyze the concepts of supply, demand, quantity supplied, quantity demanded, and price.
1. Supply: The supply of popcorn refers to the quantity of popcorn that producers are willing to offer for sale at different price levels. A rise in the price of coke is not directly related to the supply of popcorn, so it does not affect the supply curve of popcorn. The supply curve for popcorn would remain unchanged.
2. Demand: The demand for popcorn refers to the quantity of popcorn that consumers are willing and able to purchase at different price levels. Popcorn and coke are considered complementary goods, as they are often consumed together. When the price of coke rises, it becomes more expensive for consumers to purchase coke. This could potentially result in a decrease in the demand for popcorn, as consumers may be less willing to buy popcorn without their usual complement, coke. Thus, the demand curve for popcorn might shift to the left, indicating a decrease in demand.
3. Quantity Supplied (Qs): Quantity supplied refers to the actual amount of popcorn that producers are willing to sell at a specific price. Assuming the supply curve has not shifted, a rise in the price of coke would not affect the quantity supplied of popcorn. Therefore, the quantity supplied of popcorn should remain unchanged.
4. Quantity Demanded (Qd): Quantity demanded refers to the actual amount of popcorn that consumers are willing to buy at a specific price. As mentioned earlier, a rise in the price of coke could result in a decrease in the demand for popcorn. This means that the quantity demanded of popcorn might decrease, indicating a leftward shift in the demand curve.
5. Price: The price of popcorn is determined by the interaction between supply and demand. If the demand for popcorn decreases due to a rise in the price of coke, and the supply curve remains unchanged, there would be an excess supply of popcorn in the market. To counter this, producers might reduce their prices to entice consumers to purchase more popcorn. Thus, the price of popcorn might decrease in response to the rise in the price of coke.
In summary, a rise in the price of coke is likely to result in a decrease in the demand for popcorn, a decrease in the quantity demanded of popcorn, and a potential decrease in the price of popcorn. However, the supply of popcorn and the quantity supplied of popcorn should remain unaffected.