An increase in the price of product A will:
A. reduce the demand for resources used in the production of A.
B. increase the demand for complementary product C.
C. increase the demand for substitute product B.
D. reduce the demand for substitute product B.
Answer: C
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If average variable costs increase as output increases, then
A) total fixed cost must be increasing also. B) marginal cost must be greater than average variable cost. C) total cost must be constant. D) output must be zero. E) average total cost must be increasing also.
Economies of scale occur when the percentage increase in output
A) exceeds the percentage increase in all inputs. B) is less than the percentage increase in all inputs. C) exceeds the percentage decrease in all inputs. D) is less than the percentage decrease in all inputs.