Questions: Progress 71% Decision Point: How Will Skyrocketing Tuition Affect Moondogs? You've just learned that tuition and fees for the next semester are expected to increase by 15%. How do you think this will impact demand for Moondogs Coffee? Select an option from the choices below and click Submit. - Demand for Moondogs Coffee likely will decrease. - Demand for Moondogs Coffee likely will remain unchanged. - Demand for Moondogs Coffee likely will increase.

The answer is: Demand for Moondogs Coffee likely will decrease.

Explanation:

1. Demand for Moondogs Coffee likely will decrease: This option is correct because an increase in tuition and fees by 15% can lead to a decrease in disposable income for students. As a result, students may cut back on non-essential expenses, such as coffee from Moondogs, to manage their budgets more effectively. This is based on the economic principle that when consumers face higher costs in one area, they often reduce spending in other areas to compensate.

2. Demand for Moondogs Coffee likely will remain unchanged: This option is less likely because a significant increase in tuition costs typically affects students' spending behavior. While some students may continue to purchase coffee at the same rate, overall demand is expected to decrease as students adjust their budgets.

3. Demand for Moondogs Coffee likely will increase: This option is unlikely because an increase in tuition fees generally reduces students' disposable income, leading to decreased spending on non-essential items like coffee. It is improbable that demand would increase under these circumstances unless there are other factors at play, such as a simultaneous increase in student income or a new promotion by Moondogs that offsets the tuition increase.