If the Price of Tangerines Increases,the Price of Oranges Also

question 19

Multiple Choice

If the price of tangerines increases,the price of oranges also rises because

• A) consumers consider the two goods complements and so sellers decreased the supply of oranges.
• B) consumers consider the two goods substitutes and demand for oranges increases.
• C) if the supply of tangerines decreased, then the supply of oranges also must decrease.
• D) buyers must have expected a higher price for oranges and thus increased their demand for oranges.
• E) buyers' incomes must have decreased and oranges are an inferior good.

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Definitions:

Average Fixed Costs

The total fixed costs of production divided by the quantity of output produced, indicating how fixed costs change with different levels of production.

Marginal Costs

The increase in total cost that arises from an extra unit of production.

Fixed Factors

Inputs in production that cannot be altered in the short term, such as buildings and machinery.

Output

The amount of goods and services produced by a business, industry, or economy.