If Milk and Cookies Are Complements and the Price of Cookies

question 57

Multiple Choice

If milk and cookies are complements and the price of cookies rises, we would expect to see:

• A) an increase in the demand for milk.
• B) a decrease in the demand for milk.
• C) an increase in the quantity demanded for milk but no change in demand.
• D) a decrease in the quantity demanded for milk but no change in demand.

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Definitions:

Dollar Amount

The value of something measured in units of currency, specifically U.S. dollars.

Preferred Stock

A class of stock that provides a specific dividend that is paid before any dividends are paid to common stock holders, and which typically has priority over common stock in the event of a liquidation.

Common Stock

A form of corporate equity ownership, representing a claim on a portion of a company's profits and a right to vote on some corporate decisions.

Capital Stock

The total amount of stock that a company is authorized to issue, representing ownership in the company.