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Using our knowledge of both demand and supply curves, we're going to show and explain the impact of the following.
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A, an increase in consumer incomes on the price of restaurant meals.
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So part a, an increase in consumer incomes on the price of restaurant meals.
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So with an increase in income of the consumers, their demand for restaurant food will increase because they are now able to afford more.
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So as their income goes up, they may go out more and they may go to better restaurants.
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Because of this, the demand curve will shift to the right.
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The supply does not change.
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And as a result of this, equilibrium price increases and equilibrium quantity also increases.
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Part b, an increase in the price of cheese on the price of pizza.
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With an increase in the price of cheese, the cost of production of pizza will increase.
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As a result, the supply of pizza will decline.
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So quantity supplied goes down, and the supply curve shifts left.
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This results in the equilibrium price increasing and equilibrium quantity decreasing.
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Part c, a decrease in the price of starbucks coffee on the price of.
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Of a second cup of coffee.
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Starbucks coffee and second cup coffee, second cup being another place to get coffee, not an additional cup of coffee, are substitutes for one another...