Which of the Following Statements Represents a Correct and Sequentially

question 11

Multiple Choice

Which of the following statements represents a correct and sequentially accurate economic explanation?

• A) X and Y are substitutes. The price of X falls, the quantity demanded of X rises, and the demand for Y rises.
• B) X and Y are substitutes. The price of X rises, the demand for X falls, and the demand for Y rises.
• C) X and Y are substitutes. The price of X falls, the demand for X rises, and the quantity demanded of Y rises.
• D) X and Y are substitutes. The price of X falls, the quantity demanded of X rises, and the demand for Y falls.
• E) X and Y are complements. The price of X falls, the quantity demanded of X rises, and the demand for Y falls.

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Definitions:

Marginal Cost

Marginal cost is the increase in total cost that arises from producing one additional unit of a good or service.

Lawn-mowing

The act of cutting grass to a uniform length, often done as routine maintenance for residential and commercial landscapes.

Perfectly Competitive

Describes a market structure where there are many buyers and sellers, all selling homogeneous products, with no single buyer or seller able to influence the market price.

Fixed Cost

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.