Bikes and Roller Blades Are Substitutes

question 41

Multiple Choice

Bikes and roller blades are substitutes.Marginal utility theory predicts that when the price of a bike rises,the quantity of bikes demanded

• A)decreases and the demand curve for roller blades shifts rightward.
• B)decreases and the demand curve for roller blades shifts leftward.
• C)decreases and a movement occurs down along the demand curve for roller blades.
• D)increases and the demand curve for roller blades shifts rightward.
• E)increases and the demand curve for roller blades shifts leftward.

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Definitions:

Inelastic

Describes a situation where the demand or supply for a good or service is relatively unresponsive to changes in price, meaning that price variations have little effect on the quantity demanded or supplied.

Elastic Demand

A situation where the demand for a product is sensitive to price changes, with relatively large changes in demand for small changes in price.

Revenue

The total amount of money generated by the sale of goods or services before any costs or expenses are deducted.

Unit Price Elastic

A condition where a change in the price of a good or service has a proportional change in the quantity demanded or supplied.