The Cross Elasticity of Demand for Blank DVDs and DVD

question 12

Multiple Choice

The cross elasticity of demand for blank DVDs and DVD burners is likely to be

• A) positive because they are substitutes.
• B) positive because they are complements.
• C) negative because they are substitutes.
• D) negative because they are complements.
• E) negative because with the advent of digital cameras, film and film cameras are inferior goods.

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Definitions:

Cost Of Goods Sold

A financial measure that calculates the cost incurred to produce products sold by a company, including materials and labor.

Gross Profit

The income a business earns once it subtracts the expenses involved in producing and marketing its goods, or the expenses related to delivering its services.

Other Revenue And Expenses

These refer to the income and costs that are not related to the main business activities of a company.

Purchases Account

An account used in the accounting for all goods bought for resale or for use in the production process.