Which of the Following Would Cause the Equilibrium Price of Ketchup

question 67

Multiple Choice

Which of the following would cause the equilibrium price of ketchup to increase and the equilibrium quantity of ketchup to decrease?

• A)a decrease in the price of tomatoes
• B)an increase in the price of tomatoes
• C)an increase in the price of mustard,a substitute for ketchup
• D)an increase in the price of french fries,a complement for ketchup

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Definitions:

MC < MR

A condition in which the marginal cost of producing an additional item is less than the marginal revenue earned from selling it, suggesting that increasing production is profitable.

Profit

The financial gain obtained when the revenue from business activities exceeds the expenses, costs, and taxes.

License Fee

A charge paid for permission to use intellectual property, enter a market, or perform certain activities within a regulatory framework.

Economic Profit

The surplus remaining after total costs are subtracted from total revenue, considering both explicit and implicit costs.