Assuming DVDs and DVD Players Are Complements, the Effect of an Increase

question 124

Multiple Choice

Assuming DVDs and DVD players are complements, the effect of an increase in the price of DVD players on the market for DVDs is a(n) :

• A) downward movement along the demand curve for DVDs.
• B) upward movement along the demand curve for DVDs.
• C) rightward shift in the demand curve for DVDs.
• D) leftward shift in the demand curve for DVDs.

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Definitions:

Intrinsic Value

The actual, fundamental worth of an asset, based on underlying perceptions of its true value including all aspects of the business, in terms of both tangible and intangible factors.

Call

A financial term referring to an option contract that gives the holder the right, but not the obligation, to buy a specific amount of a security at a specific price within a specific time period.

Exercise Price

The price at which the holder of an options contract can buy (in the case of a call option) or sell (in the case of a put option) the underlying asset or security.

Stock Price

The cost of purchasing one share of a company, which fluctuates based on market conditions and perceived value.