As a Result of an Increase in the Price of a Substitute

question 89

Multiple Choice

As a result of an increase in the price of a substitute for your firm's product, you should anticipate a________ price for your product than the current equilibrium price and a________ equilibrium quantity than the current equilibrium quantity.

• A)higher; higher
• B)higher; lower
• C)lower; higher
• D)lower; lower

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Definitions:

Shipment Contract

A type of sale contract in which the seller is obligated to send the goods to the buyer, but the risk of loss passes to the buyer when the goods are delivered to the carrier.

Nonconforming

Refers to goods, services, or actions that fail to meet previously agreed upon standards, specifications, or regulations.

CIF

Cost, Insurance, and Freight, a term used in international shipping where the seller is responsible for the cost, insurance, and freight of delivering goods.

Insure Goods

To insure goods means to secure a financial protection or coverage against possible damage, loss, or theft through an insurance policy.