When the price of a particular commodity increases, it can have a ripple effect on the demand for other related commodities. In this case, we will explore how an increase in the price of tea can affect the demand for coffee and sugar.



Let's assume that the price of tea has increased due to a shortage in supply. This means that consumers will have to pay more to purchase the same amount of tea.



Coffee and tea are substitutes for each other, as they are both popular hot beverages. When the price of tea increases, some consumers may switch to drinking coffee instead. This means that the demand for coffee may increase as a result of the increase in the price of tea.



Sugar is a complementary good to both tea and coffee, as many people add sugar to their hot beverages for sweetness. When the price of tea increases, some consumers may choose to drink less tea and therefore use less sugar overall. This means that the demand for sugar may decrease as a result of the increase in the price of tea.



To illustrate this concept, we can use a demand and supply graph for tea, coffee, and sugar. When the price of tea increases, the demand curve for tea shifts to the left, as consumers are less willing to purchase tea at a higher price. At the same time, the demand curve for coffee shifts to the right, as some consumers switch to drinking coffee instead. The demand curve for sugar shifts to the left, as some consumers use less sugar overall when they drink less tea.

Overall, the effect on the demand for coffee and sugar will depend on the extent to which consumers switch from tea to coffee and reduce their sugar consumption. However, it is clear that an increase in the price of tea can have an impact on the demand for related commodities.