A(n)________ Is a Potential Threat; Customers Use It as an Alternative

question 47

Multiple Choice

A(n) ________ is a potential threat; customers use it as an alternative, buying less of one kind of product but more of another.

• A)new entrant
• B)substitute
• C)ensemble
• D)divestiture
• E)complement

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Definitions:

Short-run Average Cost

The total cost divided by the quantity of output produced, in the short term when at least one input is fixed.

Long-run Average Cost

The per-unit cost of production in the long term, where all inputs can be varied and economies of scale can be achieved.

Substitution

Substitution refers to the economic principle where users replace one good or service with another in response to changes in price, technology, or consumer preferences.

Product Transformation Curve

Curve showing the various combinations of two different outputs (products) that can be produced with a given set of inputs.