Refer to the graph below showing the market for a product. Which of the following could not explain the indicated increase in equilibrium price from P1 to P2?
A. An increase in consumer incomes
B. An increase in production costs
C. A decrease in the price of a complementary product
D. An increase in the price of a substitute product
B. An increase in production costs
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Compounding is:
A. the process of deposits steadily increasing a set amount annually. B. the process of accumulation of additional interest paid on interest that has already been earned. C. the process of adding the percentage of interest times your initial principal yearly. D. None of these statements is true.
For inferior goods
A. the substitution and income effects of a price increase will both decrease the quantity of the good demanded. B. the substitution effect of a price increase will decrease the quantity of the good demanded while the income effect of a price increase will increase the quantity of the good demanded. C. the substitution and income effects of a price increase will both increase the quantity of the good demanded. D. the substitution effect of a price increase will increase the quantity of the good demanded while the income effect of a price increase will decrease the quantity of the good demanded.