If Air Travel and Bus Travel Are Substitutes

question 76

Multiple Choice

If air travel and bus travel are substitutes,

• A) an increase in the price of bus travel will decrease the demand for air travel.
• B) a decrease in the price of bus travel will decrease the demand for air travel.
• C) an increase in the price of bus travel will generally have no effect on the demand for air travel.
• D) an increase in the price of bus travel will shift the demand curve for air travel to the left.

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Definitions:

Service Life

Service life is the expected period during which an asset remains useful and operational for its intended purpose.

Machinery

Refers to machines, equipment, and devices that perform various tasks on a larger scale or operate in a system designed for a specific application.

Bad Debt Reserve

Also known as the allowance for doubtful accounts, it represents funds set aside to account for projected losses from unpaid customer debts.

Receivables Collected

Receivables collected refer to the process of gathering or receiving payments from customers or clients against the credit sales or services provided earlier.