If an Increase in the Price of Peaches Reduces the Demand

question 229

Multiple Choice

If an increase in the price of peaches reduces the demand for cream, this indicates that peaches and cream are

• A) normal goods.
• B) inferior goods.
• C) complements.
• D) substitutes.

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Definitions:

Equilibrium Price

The market price at which the quantity of goods supplied equals the quantity of goods demanded.

Equilibrium Quantity

The quantity of goods or services supplied that equals the quantity demanded at the market equilibrium price.

Positively Sloped

A line or curve on a graph that increases in value as it moves from left to right, indicating a direct relationship between two variables.

Negatively Sloped

A descriptor for a line on a graph that moves downwards from left to right, indicating an inverse relationship between the variables plotted.