'Because Corn Chips and Salsa Are Complements, an Increase in the Price

question 104

Multiple Choice

'Because corn chips and salsa are complements, an increase in the price of corn chips will cause the demand for salsa to decrease. This initial shift in demand for corn chips results in a higher price for corn chips; this higher price will cause the demand curve for corn chips to shift to the right.' Which of the following correctly comments on this statement?

• A)The statement will be true if consumer tastes for corn chips and salsa do not change.
• B)The statement is false because a change in the price of corn chips would not change the demand for corn chips.
• C)The statement is false because salsa is an inferior good; corn chips are normal goods.
• D)The statement is false because one cannot assume that corn chips and salsa are complements for all consumers.

---

Definitions:

LIFO

"Last In, First Out," an inventory valuation method where the goods purchased last are the first ones to be used or sold.

Gross Profit

The financial metric representing the difference between sales revenue and the cost of goods sold (COGS), before deducting overhead, payroll, taxes, and interest payments.

Ending Inventory

Merchandise value set for sale at an accounting period's end.

Safeguarding Inventory

Safeguarding inventory involves implementing security measures and inventory management practices to protect goods from theft, damage, or loss.