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Please answer the following questions and add drawings when requested. Thank you. 5. Problems and Applications Q5 Cups of coffee and donuts are complements. hssume

Please answer the following questions and add drawings when requested. Thank you.

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5. Problems and Applications Q5 Cups of coffee and donuts are complements. hssume both have elastic demand. Suppose exceptionally good weather increases the harvest of the coffee bean crop. Show the eh'ect of the huge harvest on the market for coh'ee beans. \fShow the effect of the price change of coffee beans you have identified on the first graph on the market for cups of coffee. :1: :1: I1: c: U .._ c: u: :1 :: U .._ c: u: U ': [L -----+ Quantity of Cu :15 ofCoee The V in the equilibrium price of a cup of coffee causes the quantity demanded to V . Because the demand for cups of coffee is elastic in this region; total expenditure on coffee v . Show the effect of the price change in cups of coffee you have identified on the second graph on the market for donuts.

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