When the Price of a Good Falls, Consumers Buy More

question 204

Multiple Choice

When the price of a good falls, consumers buy more of the good because it is cheaper relative to competing goods. This statement describes the

• A) consumer equilibrium effect.
• B) price effect.
• C) income effect.
• D) substitution effect.

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Definitions:

Salvage Value

The calculated remaining value of an asset at the conclusion of its effective life.

Technician Costs

Technician costs refer to expenses related to employing or contracting technicians, including wages, benefits, and any training-related costs for technical staff.

Fixed Costs

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance.

Net Income

The total profit of a company after all expenses, including taxes and operational costs, are deducted from revenue.