(Figure: Quantity of Goods Y and X III) Because of the Substitution

question 128

Multiple Choice

(Figure: Quantity of Goods Y and X III) Because of the substitution effect associated with the decrease in the price of good X, the quantity of good X purchased:

• A) increases from 3 to 5.
• B) decreases from 3 to 2.
• C) increases from 2 to 3.
• D) increases from 2 to 5.

---

Definitions:

Corporation

A legal entity that is separate and distinct from its owners, capable of owning property, borrowing money, suing or being sued.

Demand

A strong request for something to be given or done, often under the threat of consequences for non-compliance.

Board Of Directors

A group of individuals elected to represent shareholders and make decisions on major company issues.

Merger

In corporation law, traditionally, a transaction by which one corporation acquires another corporation, with the acquiring corporation being owned by the shareholders of both corporations and the acquired corporation going out of existence. Today, loosely applied to any negotiated acquisition of one corporation by another.