If the Price of a Good Increases,holding All Else Constant

question 73

Multiple Choice

If the price of a good increases,holding all else constant,

• A) the demand for all of that good's substitutes will decrease.
• B) the quantity demanded for that good will increase.
• C) the demand for all of that good's complements will increase.
• D) the demand for all of that good's substitutes will increase.
• E) the demand curve will shift to the left.

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Definitions:

Economic Efficiency

The optimal distribution of resources in a manner that maximizes the total utility to all individuals in the economy.

Governmental Direction

Guidance or regulation provided by government bodies to influence or control certain activities, industries, or economic policies.

Roundabout Production

An economic concept that refers to more capital-intensive and indirect methods of production, which, although initially more time-consuming and costly, lead to greater efficiencies and outputs in the long run.

Capital Goods

Capital goods are physical assets that a business uses in the production process to manufacture products and services that consumers will later use.