Suppose Target Decided to Lower the Price on All Shirts

question 407

Multiple Choice

Suppose Target decided to lower the price on all shirts as part of its Back to School promotion. The cross elasticity of demand between pants and shirts is negative. Lowering the price on shirts will ________ the demand for pants because shirts and pants are ________.

• A) increase; substitutes
• B) decrease; substitutes
• C) increase; complements
• D) decrease; complements

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Definitions:

Standard Hours

The set amount of time expected to be spent on a particular task, project, or to produce a certain quantity of goods.

Materials Price Variance

The difference between the actual cost of materials purchased and the expected cost at standard pricing, indicating cost management efficiency.

Standard Quantity

The predetermined amount of materials or inputs that should be used in the production of a single unit of goods, serving as a benchmark for efficiency.

Actual Output

The real production quantity completed within a specific period.