If an Increase in the Supply of Good a Decreases

question 65

Multiple Choice

If an increase in the supply of good A decreases the demand for good B,then

• A)the cross elasticity of supply for good B with respect to the price of good A is negative.
• B)the elasticity of supply for good A is greater than 1.
• C)A and B are complements.
• D)A and B are substitutes.
• E)the demand for A is price elastic.

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Definitions:

Price Fixing

A practice where companies conspire to keep prices at a certain level, often higher than would naturally occur in a competitive market, which is illegal in many jurisdictions.

Poor Service

Substandard service delivery that fails to meet customer expectations or requirements.

Value Chain Management

The process of managing activities and processes to create value for customers, from product design to final sales and after-sales service.

Supply Chain Management

The management of the flow of goods and services, involving the movement and storage of raw materials, of work-in-process inventory, and of finished goods from point of origin to point of consumption.