Suppose Two Goods a and B Are Complements

question 73

Multiple Choice

Suppose two goods A and B are complements.If the price of good A has increased,which of the following statements is true?

• A)Demand for good B will shift to the left, there will be a temporary shortage of good A
• B) Demand for good A will shift to the left, there will be a temporary surplus of good A.
• C) Demand for good B will shift to the right, there will be a temporary surplus of good B.
• D) Demand for good B will shift to the left, there will be a temporary surplus of good B.

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Definitions:

Long Run

A period during which all factors of production and costs are variable, allowing full adjustment to any change.

Fixed Cost

Describes expenses that do not change with the level of production or business activity, such as rent, salaries, and insurance premiums.

Variable Cost

Costs that change in proportion to the good or service that a business produces.

Total Cost

The complete cost of production, including both fixed and variable costs.