If the Price of Good a Decreases by 10 Percent

question 3

Multiple Choice

If the price of good A decreases by 10 percent and the quantity demanded of good B increases by 10 percent, this is evidence that goods A and B are

• A)substitute for one another.
• B)complement goods to one another.
• C)both inferior goods.
• D)both normal goods.
• E)not related.

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Definitions:

Net Operating Income

The income generated from normal business operations, calculated as revenues minus operating expenses excluding taxes and interest.

Common Corporate Costs

Common Corporate Costs refer to expenses incurred by a company that cannot be directly attributed to a specific business segment or product, such as headquarters expenses.

Variable Expenses

Costs that vary directly with the level of production or business activity, such as raw materials and direct labor.

Fixed Expenses

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