Other Things Being Equal, the Effect of a Decrease in the Price

question 174

Multiple Choice

Other things being equal, the effect of a decrease in the price of DVDs on the market for DVD players is a(n) :

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

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Definitions:

Sunk Cost

An expense that has been paid and cannot be retrieved.

Expected Cost

An estimate of the cost for a product, project, or operation that is anticipated under normal conditions.

Sell

The act of giving or handing over something in exchange for money.

Contribution Margin

The difference between sales revenue and variable costs, indicating how much revenue contributes to covering fixed costs and generating profit.