Given that milk and cookies are complements, suppose the price of flour (an ingredient in cookies) rises. What happens in the market for cookies?
A) The equilibrium price and quantity rise.
B) The equilibrium price rises, and the equilibrium quantity falls.
C) The equilibrium price and quantity fall.
D) The equilibrium price falls, and the equilibrium quantity rises.
Ans: B) The equilibrium price rises, and the equilibrium quantity falls.
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The result that different auction styles in which the good goes to the winner with the highest valuation of the good generate the same amount of revenue is called
A) Revenue Equivalence Theorem. B) Marginal Revenue Theory. C) Auction Revenue Theory. D) First Bid Revenue Theorem.
The amount of money that could have been made by renting a piece of land to be used for building an office building instead of using the land for employee parking is a(n):
a. implicit cost. b. accounting cost. c. explicit cost. d. pure economic cost.