-The Increase in the Demand for Widgets, Shown in the Figure

question 511

Multiple Choice

-The increase in the demand for widgets, shown in the figure above, is the result of a decrease in the price of McBoover devices. Therefore

• A) widgets and McBoover devices are substitutes.
• B) widgets and McBoover devices are complements.
• C) widgets are a normal good.
• D) McBoover devices are a normal good.

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Definitions:

Cycle Inventory

The average inventory a business maintains to satisfy its normal demand during a production or purchasing cycle.

Economies of Scale

Cost advantages obtained by businesses when production becomes efficient, leading to lower per-unit costs.

Profit

The financial gain, typically the difference between the amount earned from selling goods or services and the costs of producing them.

Average Flow Time

The average time that it takes for a task, workpiece, or process to be completed in a system.