Consider Butter and Margarine, Which Are Substitutes

question 46

Multiple Choice

Consider butter and margarine, which are substitutes. When the price of butter falls, the demand curve for margarine is likely to

• A)shift to the left.
• B)remain stationary.
• C)remain stationary, although its price will rise.
• D)remain stationary, although its price will fall.
• E)shift to the right.

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Definitions:

Supply Costs

Expenses incurred in acquiring the goods or services needed to run a business, including raw materials, parts, and utilities.

Spending Variance

The difference between the actual amount spent and the amount that was budgeted for a particular period.

Square Feet

A unit of area measurement equal to a square that is one foot on each side, commonly used in real estate and interior planning.

Indirect Materials

Materials used in the support of the production process that are not easily traced to specific products, essential for maintaining production equipment.